Assessment and Collection of Regulatory Fees for Fiscal Year 2014; Assessment and Collection of Regulatory Fees for Fiscal Year 2013; and Procedures for Assessment and Collection of Regulatory Fees

 
CONTENT

Federal Register, Volume 79 Issue 128 (Thursday, July 3, 2014)

Federal Register Volume 79, Number 128 (Thursday, July 3, 2014)

Proposed Rules

Pages 37982-38004

From the Federal Register Online via the Government Printing Office www.gpo.gov

FR Doc No: 2014-15167

=======================================================================

-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

MD Docket Nos. 12-201; 13-140; 14-92; FCC 14-88

Assessment and Collection of Regulatory Fees for Fiscal Year 2014; Assessment and Collection of Regulatory Fees for Fiscal Year 2013; and Procedures for Assessment and Collection of Regulatory Fees

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: In this document, the Federal Communications Commission (Commission) will revise its Schedule of Regulatory Fees in order to recover an amount of $339,844,000 that Congress has required the Commission to collect for fiscal year 2014.

DATES: Submit comments on or before July 7, 2014, and reply comments on or before July 14, 2014.

ADDRESSES: You may submit comments, identified by MD Docket No. 14-92, by any of the following methods:

Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs. Follow the instructions for submitting comments.

People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: 202-418-

0530 or TTY: 202-418-0432.

Email: ecfs@fcc.gov. Include MD Docket No. 14-92 in the subject line of the message.

Mail: Commercial overnight mail (other than U.S. Postal Service Express Mail, and Priority Mail, must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-

class, Express, and Priority mail should be addressed to 445 12th Street SW., Washington DC 20554.

For detailed instructions for submitting comments and additional information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing Director at (202) 418-0444.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice of Proposed Rulemaking (NPRM), Second Further Notice of Proposed Rulemaking, and Order, FCC 14-88, MD Docket No. 14-92, adopted on June 12, 2014 and released June 13, 2014. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street SW., Room CY-A257, Portals II, Washington, DC 20554, and may also be purchased from the Commission's copy contractor, BCPI, Inc., Portals II, 445 12th Street SW., Room CY-B402, Washington, DC 20554. Customers may contact BCPI, Inc. via their Web site, http://www.bcpi.com, or call 1-800-378-3160. This document is available in alternative formats (computer diskette, large print, audio record, and braille). Persons with disabilities who need documents in these formats may contact the FCC by email: FCC504@fcc.gov or phone: 202-418-0530 or TTY: 202-418-0432.

  1. Procedural Matters

    Ex Parte Rules Permit-But-Disclose Proceeding

    1. The Notice of Proposed Rulemaking (FY 2014 NPRM), Second Further Notice of Proposed Rulemaking, and Order shall be treated as a ``permit-but-disclose'' proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda, or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with Sec. 1.1206(b). In proceedings governed by Sec. 1.49(f) or for which the Commission has made available a method of electronic filing,

      Page 37983

      written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

      Comment Filing Procedures

    2. Comments and Replies. Pursuant to Sec. Sec. 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using: (1) The Commission's Electronic Comment Filing System (ECFS), (2) the Federal Government's eRulemaking Portal, or (3) by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).

      Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/ or the Federal eRulemaking Portal: http://www.regulations.gov.

      Paper Filers: Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.

      Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

      dec222 All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building.

      dec222 Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

      dec222 U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington DC 20554.

      People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-

      418-0432 (tty).

    3. Availability of Documents. Comments, reply comments, and ex parte submissions will be available for public inspection during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street SW., CY-A257, Washington, DC 20554. These documents will also be available free online, via ECFS. Documents will be available electronically in ASCII, Word, and/or Adobe Acrobat.

    4. Accessibility Information. To request information in accessible formats (computer diskettes, large print, audio recording, and Braille), send an email to fcc504@fcc.gov or call the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY). This document can also be downloaded in Word and Portable Document Format (``PDF'') at: http://www.fcc.gov.

      Initial Paperwork Reduction Act

    5. This NPRM and Second Further Notice of Proposed Rulemaking document solicits possible proposed information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the possible proposed information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it can further reduce the information collection burden for small business concerns with fewer than 25 employees.

      Initial Regulatory Flexibility Analysis

    6. An initial regulatory flexibility analysis (``IRFA'') is contained in Attachment E. Comments to the IRFA must be identified as responses to the IRFA and filed by the deadlines for comments on the Notice of Proposed Rulemaking (NPRM). The Commission will send a copy of this NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.

  2. Introduction and Executive Summary

    1. In this Notice of Proposed Rulemaking, Second Further Notice of Proposed Rulemaking, and Order (Notice), the Federal Communication Commission seeks comment on its proposed regulatory fees for fiscal year (FY) 2014, and how it can improve its regulatory fee process. In 2013, the Commission sought comment \1\ on several proposals to revise the regulatory fee process to more accurately reflect the regulatory activities of current Commission full time employees (FTEs).\2\ In the FY 2013 Report and Order,\3\ released on August 12, 2013, the Commission adopted a number of these proposals, including updating the number of FTEs in the core bureaus, reallocating certain FTEs in the International Bureau for regulatory fee purposes, establishing a new regulatory fee category to include Internet Protocol TV (IPTV), and consolidating UHF and VHF Television stations into one fee category.

      ---------------------------------------------------------------------------

      \1\ Procedures for Assessment and Collection of Regulatory Fees; Assessment and Collection of Regulatory Fees for Fiscal Year 2013, Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking, 78 FR 34612 (June 10, 2013) (FY 2013 NPRM). Regulatory fees are mandated by Congress in section 9 of the Communications Act of 1934, as amended (Communications Act or Act), and collected to recover the regulatory costs associated with the Commission's enforcement, policy and rulemaking, user information, and international activities. 47 U.S.C. 159(a).

      \2\ One FTE, a ``Full Time Equivalent'' or ``Full Time Employee,'' is a unit of measure equal to the work performed annually by a full time person (working a 40 hour workweek for a full year) assigned to the particular job, and subject to agency personnel staffing limitations established by the U.S. Office of Management and Budget.

      \3\ Assessment and Collection of Regulatory Fees for Fiscal Year 2013, Report and Order, 78 FR 52433 (August 23, 2013) (FY 2013 Report and Order).

      ---------------------------------------------------------------------------

    2. This Notice seeks comment on the regulatory fees proposed for FY 2014, set forth in Table B, and on whether AM expanded band radio stations should remain exempt from regulatory fees. In addition, the Commission explains that, for calculating FY 2014 regulatory fees, the following previously adopted provisions will apply: (1) UHF/VHF regulatory fees will be combined into one digital television fee category and (2) IPTV will be included in the cable television systems category for regulatory fee purposes. In addition, the Commission finds it in the public interest to maintain the Commercial Mobile Radio Service (CMRS) messaging rate at $.08 per subscriber.

    3. In the attached Second Further Notice of Proposed Rulemaking, the Commission seeks comment on additional reform measures to improve

      Page 37984

      the regulatory fee process, including the adoption of methodologies tailored to ensure a more equitable distribution of the regulatory fee burden among categories of Commission licensees under the statutory framework in section 9 of the Communications Act.\4\ Some of the issues for which comment is sought were raised by commenters in FY 2013 (or earlier) and now the Commission tailors its inquiry, in response to the more developed record, to further examine these proposals. Proposals for which further comment is sought include: (1) Reallocating some of the FTEs from the Enforcement Bureau, the Consumer & Governmental Affairs Bureau (CGB), and the Office of Engineering and Technology (OET) as direct FTEs for regulatory fee purposes; (2) reapportioning the fee allocations between groups of International Bureau regulatees; (3) periodically updating FTE allocations; (4) applying a cap on any regulatory fee increases for FY 2014; (5) improving access to information through our Web site; (6) establishing a higher de minimis threshold, such as $100, $500, or $1,000; (7) eliminating certain regulatory fee categories that account for a small amount of regulatory fee payments; (8) combining Interstate Telecommunications Service Providers (ITSP) and wireless voice services into one fee category; (9) adding direct broadcast satellite (DBS) operators to the cable television and IPTV category; (10) creating a new regulatory fee category for non-U.S. licensed space stations, or, alternatively, reallocating some FTEs assigned to work on non-U.S. licensed space station issues as indirect for regulatory fee purposes; and (11) adding a new regulatory fee category for toll free numbers. Some of these reforms would constitute mandatory amendments pursuant to section 9(b)(2) of the Act. To the extent that some of the reforms and other changes would constitute permitted amendments, Congressional notification pursuant to sections 9(b)(3) and 9(b)(4)(B) would be required. In addition, the Commission is adopting revisions to Sec. Sec. 1.1112, 1.1158, 1.1161, and 1.1164 of our rules,\5\ to correspond with the Commission's FY 2013 Report and Order requiring electronic payment of regulatory fees.\6\

      ---------------------------------------------------------------------------

      \4\ 47 U.S.C. 159.

      \5\ 47 CFR 1.1112, 1.1158, 1.1161, 1.1164. See Table F for the revised rules.

      \6\ See FY 2013 Report and Order, 78 FR 52445, paragraph 47 (August 23, 2013) (FY 2013 Report and Order).

      ---------------------------------------------------------------------------

  3. Background

    1. Congress requires the Commission to collect regulatory fees ``to recover the costs of . . . enforcement activities, policy and rulemaking activities, user information services, and international activities.'' \7\ The fees assessed each fiscal year are to ``be derived by determining the full-time equivalent number of employees performing'' these activities, ``adjusted to take into account factors that are reasonably related to the benefits provided to the payer of the fee by the Commission's activities. . . .'' \8\ Regulatory fees recover direct costs, such as salary and expenses; indirect costs, such as overhead functions; and support costs, such as rent, utilities, or equipment.\9\ Regulatory fees also cover the costs incurred by entities that are exempt from paying regulatory fees,\10\ entities whose regulatory fees are waived,\11\ and entities that provide nonregulated services.\12\ Congress sets the amount the Commission must collect each year in the Commission's fiscal year appropriations, and section 9(a)(2) of the Act requires us to collect fees sufficient to offset, but not exceed, the amount appropriated. For FY 2014, this amount is $339,844,000.

      ---------------------------------------------------------------------------

      \7\ 47 U.S.C. 159(a).

      \8\ 47 U.S.C. 159(b)(1)(A).

      \9\ See Assessment and Collection of Regulatory Fees for Fiscal Year 2004, Report and Order, 69 FR 41030, paragraph 11 (July 7, 2004) (FY 2004 Report and Order).

      \10\ For example, governmental and nonprofit entities are exempt from regulatory fees under section 9(h) of the Act. 47 U.S.C. 159(h); 47 CFR 1.1162.

      \11\ 47 CFR 1.1166.

      \12\ For example, broadband services.

      ---------------------------------------------------------------------------

    2. To calculate regulatory fees, the Commission allocates the total collection target, as mandated by Congress each year, across all regulatory fee categories. The allocation of fees to fee categories is based on the Commission's calculation of FTEs in each regulatory fee category. Historically, the Commission allocated FTEs as ``direct'' if the employee is in one of the four ``core'' bureaus; otherwise, that employee was considered an ``indirect'' FTE.\13\ The total FTEs for each fee category includes the direct FTEs associated with that category, plus a proportional allocation of the indirect FTEs. Each regulatee within those fee categories then pays a proportionate share based on some objective measure, e.g., revenues, subscribers, or licenses.

      ---------------------------------------------------------------------------

      \13\ The core bureaus are the Wireline Competition Bureau, Wireless Telecommunications Bureau, Media Bureau, and part of the International Bureau. The ``indirect'' FTEs are the employees from the following bureaus and offices: Enforcement Bureau, Consumer & Governmental Affairs Bureau, Public Safety and Homeland Security Bureau, Chairman and Commissioners' offices, Office of Managing Director, Office of General Counsel, Office of the Inspector General, Office of Communications Business Opportunities, Office of Engineering and Technology, Office of Legislative Affairs, Office of Strategic Planning and Policy Analysis, Office of Workplace Diversity, Office of Media Relations, and Office of Administrative Law Judges, totaling 954 FTEs (excluding auctions FTEs).

      ---------------------------------------------------------------------------

    3. In the FY 2012 NPRM,\14\ the Commission proposed updating the FTE allocations for the first time since 1998.\15\ After examining updated FTE data, the Commission determined that the International Bureau employed 22 percent of FTEs considered as direct in 2012, yet that bureau's regulatees contributed only 6.3 percent of the total regulatory fee collection for that year. In contrast, ITSPs (interexchange carriers (IXCs), incumbent local exchange carriers (LECs), toll resellers, and other IXC service providers regulated by the Wireline Competition Bureau) contributed 47 percent of the total regulatory fee collection in 2012, yet that bureau employed 29 percent of the FTEs considered direct in 2012.

      ---------------------------------------------------------------------------

      \14\ See Assessment and Collection of Regulatory Fees for Fiscal Year 2012, Notice of Proposed Rulemaking, 77 FR 29275 (May 17, 2012) (2012) (FY 2012 NPRM).

      \15\ FY 2012 NPRM, 77 FR 49752, paragraph 14 (August 17, 2012) (FY 2012 NPRM). This issue was also examined by the GAO. See GAO, Federal Communications Commission, ``Regulatory Fee Process Needs to be Updated,'' Aug. 2012, GAO-12-686 (GAO Report). The GAO concluded that the Commission should perform an updated FTE analysis to determine whether the fee categories should be revised.

      ---------------------------------------------------------------------------

    4. With respect to updating the FTE allocations, the Commission recognized that, in most of the core bureaus, the work of most of its FTEs predominantly benefits that bureau's own licensees or regulatees. The Commission found, however, that the work performed by most of the International Bureau's FTEs benefitted other bureaus' licensees or the Commission as a whole.\16\ Based on extensive review, the Commission determined that 28 of the FTEs from the Policy Division, Satellite Division, and Bureau front office of the International Bureau should be considered direct FTEs because they are engaged primarily in oversight and regulation of International Bureau licensees, such as satellite systems and submarine cable

      Page 37985

      systems.\17\ The remaining International Bureau FTEs, however, were considered indirect for regulatory fee purposes.

      ---------------------------------------------------------------------------

      \16\ FY 2013 Report and Order, 78 FR 52437, paragraph 16 (August 23, 2013) (FY 2013 Report and Order). For example, the International Bureau's largest division, Strategic Analysis and Negotiation Division (SAND), is responsible for intergovernmental and regional leadership, negotiation, and planning and oversight of the Commission's participation in international forums and conferences. SAND's activities also cover telecommunications services outside of the International Bureau's oversight and regulatory activities; e.g., coordination of wireless services with Canada and Mexico. Because the activities of the SAND FTEs benefit the licensees in other bureaus in addition to its own licensees, the Commission reallocated the FTEs in SAND as indirect FTEs.

      \17\ FY 2013 Report and Order, 78 FR 52437, paragraph 16 (August 23, 2013) (FY 2013 Report and Order).

      ---------------------------------------------------------------------------

    5. In the FY 2013 Report and Order, the Commission committed to additional regulatory fee reform and to issuing a Second Further Notice of Proposed Rulemaking, stating:

      Various other issues relevant to revising our regulatory fee program were also raised in either the FY 2013 NPRM or in comments submitted in response to it. Because we require further information to best determine what action to take on these complex issues, we will consolidate them for consideration in a Second Further Notice of Proposed Rulemaking that we will issue shortly. We recognize that these are complex issues and that resolving them will be difficult. Nevertheless, we intend to conclusively readjust regulatory fees within three years.\18\

      ---------------------------------------------------------------------------

      \18\ Id., 78 FR 52435, paragraph 7 (August 23, 2013) (FY 2013 Report and Order).

      ---------------------------------------------------------------------------

    6. To accomplish this goal, Commission staff continues its efforts to better align the work performed by its FTEs and the regulatees that benefit from such work, as required by section 9(b) of the Act. As part of these efforts, Commission staff engaged in extensive discussions with a number of Commission regulatees to obtain input concerning regulatory fee reform, including additional suggestions for FTE reallocation.\19\ The FCC now seeks comment, or further comment, on additional regulatory fee changes the Commission should adopt for FY 2014 and beyond.

      ---------------------------------------------------------------------------

      \19\ See, e.g., Enterprise Wireless Alliance, Notice of Ex Parte Presentation (Nov. 1, 2013); Competitive Carriers Association, Notice of Ex Parte Presentation (Nov. 8, 2013); Critical Messaging Association, Ex Parte Memorandum (Nov. 14, 2013); CTIA--The Wireless Association, AT&T, Verizon, and T-Mobile, Notice of Ex Parte Presentation (Nov. 15, 2013); United States Telecom Association (USTelecom), Notice of Ex Parte Presentation (Nov. 15, 2013); Satellite Industry Association (SIA), Notice of Oral Ex Parte Presentation (Nov. 22, 2013); American Cable Association (ACA), Notice of Ex Parte Presentation (Nov. 22, 2013); Independent Telephone and Telecommunications Alliance (ITTA), Notice of Ex Parte Communication (Nov. 22, 2013); North American Submarine Cable Association (NASCA), Notice of Ex Parte Presentation (Dec. 5, 2013); Intelsat Corporation Notice of Oral Ex Parte Presentation (Dec. 13, 2013); SES, Inmarsat, and Telesat, Notice of Oral Ex Parte Presentation (Dec. 13, 2013); DIRECTV, DISH Network Corp., Hughes Network Systems, and Echostar Corp., Notice of Ex Parte Presentation (Dec. 13, 2013), National Association of Broadcasters (NAB), Notice of Late-Filed Ex Parte Communication (Jan. 24, 2014).

      ---------------------------------------------------------------------------

  4. Changes Adopted in FY 2013 (or Earlier) That Will Apply in FY 2014

    1. As is discussed below, a number of substantive and procedural changes have previously been adopted and will apply to the calculation of regulatory fees in FY 2014. For the reasons discussed previously, the Commission will combine UHF/VHF regulatory fees into one digital television fee category \20\ and include IPTV in the cable television systems category.\21\ In addition, the FCC finds it in the public interest to retain the CMRS messaging rate at $.08 per subscriber.\22\

      ---------------------------------------------------------------------------

      \20\ FY 2013 Report and Order, 78 FR 52443, paragraphs 32-34 (August 23, 2013) (FY 2013 Report and Order).

      \21\ Id., 78 FR 52443-52444, paragraphs 35-36 (August 23, 2013) (FY 2013 Report and Order).

      \22\ Id., 78 FR 52444, paragraphs 38-39 (August 23, 2013) (FY 2013 Report and Order).

      ---------------------------------------------------------------------------

    2. Combining UHF/VHF Television Regulatory Fees into One Digital Television Fee Category. In the FY 2013 Report and Order, the Commission combined the VHF and UHF stations in the same market area into one fee category (with five tiered market segments) beginning in FY 2014 and eliminated the fee disparity between VHF and UHF stations.\23\

      ---------------------------------------------------------------------------

      \23\ Id., 78 FR 52443, paragraph 33 (August 23, 2013) (FY 2013 Report and Order).

      ---------------------------------------------------------------------------

    3. Internet Protocol TV is included in the Cable Television Systems Category. In the FY 2013 Report and Order, the Commission concluded that IPTV providers should be subject to the same regulatory fees as cable providers and, beginning in FY 2014, the Commission will assess regulatory fees on IPTV providers in the same manner that it assesses fees on cable television providers; the Commission is not, however, stating that IPTV providers are cable television providers.\24\

      ---------------------------------------------------------------------------

      \24\ See FY 2013 Report and Order, 78 FR 52444, paragraph 36 (August 23, 2013) (FY 2013 Report and Order). For purposes of this fee, IPTV providers include the AT&T U-Verse service and other wireline providers that deliver multiple channels of video using Internet protocol. However, the Commission notes that this regulatory fee will not apply to online video distributors (OVDs), e.g., over-the-top video providers See Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, 28 FCC Rcd 10496, 10499 n.4 (July 22, 2013).

      ---------------------------------------------------------------------------

    4. Congressional notification. As required by sections 9(b)(3) and 9(b)(4)(B) of the Act,\25\ the Commission notified Congress on March 27, 2014 of the addition of IPTV to the cable television system fee category and the combination of UHF and VHF stations in the same market into a single fee category.\26\ The pending 90-day congressional notification period expires on June 25, 2014, upon which these changes will become effective.

      ---------------------------------------------------------------------------

      \25\ 47 U.S.C. 159(b)(3); 47 U.S.C. 159(b)(4)(B).

      \26\ 47 U.S.C. 159(b)(4)(B); Letter concerning permitted amendment from Office of Managing Director, Federal Communications Commission to Chair and Ranking Members of U.S. House of Representatives' Committees on Energy and Commerce and Appropriations and applicable Subcommittees and to Chair and Ranking Members of the United States Senate Committees on Commerce, Science, and Transportation and Appropriations and applicable Subcommittees (Mar. 27, 2014).

      ---------------------------------------------------------------------------

    5. Commercial Mobile Radio Service (CMRS) Messaging. CMRS Messaging Service, which replaced the CMRS One-Way Paging fee category in 1997, includes all narrowband services.\27\ Initially, the Commission froze the regulatory fee for this fee category at the FY 2002 level to provide relief to the paging industry by setting an applicable rate of $0.08 per subscriber beginning in FY 2003.\28\ At that time the Commission noted that CMRS Messaging units had significantly declined from 40.8 million in FY 1997 to 19.7 million in FY 2003--a decline of 51.7 percent.\29\ We continue to observe a gradual decline in subscribership, which indicates that this decrease is not temporary. We will maintain the CMRS Messaging fee rate at $.08 per subscriber in FY 2014.\30\ If we adopt a new de minimis threshold, as discussed below, some of the CMRS Messaging providers will no longer be required to pay regulatory fees.

      ---------------------------------------------------------------------------

      \27\ See Assessment and Collection of Regulatory Fees for Fiscal Year 1997, Report and Order, 62 FR 37417, paragraph 60 (July 11, 1997) (FY 1997 Report and Order).

      \28\ Assessment and Collection of Regulatory Fees for Fiscal Year 2003, Report and Order, 68 FR 48451, paragraph 22 (August 13, 2003) (FY 2003 Report and Order).

      \29\ FY 2003 Report and Order, 68 FR 48451, paragraph 21 (August 13, 2003) (FY 2003 Report and Order). The subscriber base in the paging industry declined 93 percent from 40.8 million to 2.97 million between FY 1997 and FY 2013, according to FY 2013 collection data as of Sept. 30, 2013.

      \30\ If the fee rate were not frozen at $.08 per subscriber, the actual fee rate for the CMRS Messaging fee category would have been $.46 per subscriber (.39% of all fees with a projected unit count of 2.9 million).

      ---------------------------------------------------------------------------

  5. Order and Administrative Changes for FY 2014

    1. We have previously adopted several procedural changes that will apply to this year's fee collection. In particular, in the FY 2013 Report and Order we stated the Commission will no longer accept checks (including cashier's checks) and the accompanying hardcopy forms (e.g., Form 159's, Form 159-B's, Form 159-E's, Form 159-W's) for the payment of regulatory fees.\31\ This new paperless procedure will require that all payments be made by

      Page 37986

      online ACH payment, online credit card, or wire transfer. Accordingly, we revise Sec. Sec. 1.1112, 1.1158, 1.1161, and 1.1164 of our rules \32\ to correspond with the Commission's FY 2013 Report and Order requiring electronic payment of regulatory fees.\33\

      ---------------------------------------------------------------------------

      \31\ See FY 2013 Report and Order, 78 FR 52445, paragraph 48 (August 23, 2013) (FY 2013 Report and Order).

      \32\ 47 CFR 1.1112, 1.1158, 1.1161, 1.1164.

      \33\ See Rule Changes section.

      ---------------------------------------------------------------------------

    2. Carriers seeking to revise their subscriber counts can do so by accessing Fee Filer. Providers should follow the prompts in Fee Filer to record their subscriber revisions, along with any supporting documentation. In the supporting documentation, the provider will need to state a reason for the change, such as a purchase or sale of a subsidiary, the date of the transaction, and any other pertinent information that will help to justify a reason for the change. The Commission will then review the revised count and supporting documentation and either approve or disapprove the revision.

    3. For purposes of determining a CMRS provider's subscriber count, the Commission determines the quantity of assigned telephone numbers from the provider's Numbering Resource Utilization Forecast (NRUF) report and adjusts for porting to account for numbers that have been marked as assigned in their numbering systems but that reflect telephone numbers being served by another carrier.\34\ The CMRS count is based on the carrier's Operating Company Numbers (OCNs) aggregate subscriber total. For carriers that do not file an NRUF report, the Commission will not calculate an initial CMRS subscriber total. In these instances, the carriers should compute their fee payment based on subscriber counts as of December 31, 2013. Regardless of whether the Commission calculates a carrier's initial CMRS subscriber count, or the carrier self-reports its subscriber count based on December 31, 2013 totals, the Commission reserves the right to audit the number of subscribers for which regulatory fees are paid. In the event that the Commission determines that the number of subscribers paid is inaccurate, the Commission will bill the carrier for the difference between what was paid and what should have been paid, along with applicable penalties and interest. Finally, beginning this year, the Commission will no longer mail out initial CMRS assessment letters to CMRS providers.

      ---------------------------------------------------------------------------

      \34\ See Assessment and Collection of Regulatory Fees for Fiscal Year 2005 and Assessment and Collection of Regulatory Fees for Fiscal Year 2004, MD Docket Nos. 05-59 and 04-73, Report and Order and Order on Reconsideration, 70 FR 41973-41974, paragraphs 38-44 (July 21, 2005) (FY 2005 Report and Order and Order on Reconsideration).

      ---------------------------------------------------------------------------

  6. Notice of Proposed Rulemaking

    1. Proposed regulatory fees. As noted in paragraph four, in FY 2014 we are required to collect $339,844,000 in regulatory fees.\35\ Based on the new proposals below and the earlier adopted changes discussed in Section IV, above, we seek comment on the resulting proposed regulatory fees in Table B, which are based on the allocations listed in Table 1 below.

      ---------------------------------------------------------------------------

      \35\ Attachment A lists the proposed regulatory fees for FY 2014 if none of the changes proposed in the Notice are adopted. In FY 2013, the Commission was also required to collect $339,844,000 in regulatory fees. The final collection amount was $10.9 million over this total, which the Commission deposited into the U.S. Treasury. The year-to-date accumulated total is $81.9 million.

      Table 1--FY 2013 and FY 2014 Allocations of FTEs by Bureau

      ----------------------------------------------------------------------------------------------------------------

      FY 2013 FTE FY 2013 FTE FY 2014 FTE FY 2014 FTE

      Allocation Allocation Allocation Allocation

      Bureau (uncapped) (capped) \37\ (uncapped) (capped) \39\

      \36\ (percent) (percent) \38\ (percent) (percent)

      ----------------------------------------------------------------------------------------------------------------

      International................................... 6.13 6.91 6.14 6.13

      Wireless Telecommunications..................... 21.44 19.59 20.39 20.00

      Wireline Competition............................ 35.01 39.81 38.60 39.17

      Media........................................... 37.42 33.69 34.87 34.70

      ----------------------------------------------------------------------------------------------------------------

      ---------------------------------------------------------------------------

      \36\ The FY 2013 (uncapped) column represents the allocation percentages before a fee increase cap of 7.5% was applied to regulatory fee categories.

      \37\ The FY 2013 (capped) column represents the allocation percentages after a fee increase cap of 7.5% was applied to regulatory fee categories.

      \38\ The FY 2014 (uncapped) column represents the allocation percentages using updated FY 2014 FTE counts (through September 30, 2013).

      \39\ The FY 2014 (capped) column represents the allocation percentages using updated FY 2014 FTE counts (through September 30, 2013), if a cap is applied, e.g. a cap of 7.5%.

      ---------------------------------------------------------------------------

    2. AM Expanded Band Radio Stations. The AM Expanded Band licensing rules were adopted in the 1990's to promote the cancellation of licenses of ``high interfering'' stations in the AM standard band. Migration to the AM Expanded Band was voluntary, and a migrating licensee was allowed a five-year period to operate in both bands, after which it was to relinquish either its lower band or expanded band frequency, at its option. As an incentive to move to the expanded band, the Commission decided not to subject these AM radio stations to regulatory fees. In the FY 2008 FNPRM, however, the Commission stated that ``there is no compelling reason to permanently exempt AM expanded band licensees from paying regulatory fees. As a general matter, it would be appropriate to treat the AM expanded band and the AM standard band similarly for regulatory fee purposes.'' \40\ There is no longer a reason to provide a regulatory incentive to AM broadcasters in the expanded band. A number of those broadcasters relinquished their standard band licenses and have chosen to operate exclusively in the expanded band; at least two opted to retain their standard band licenses. There is no reason why broadcasters who have retained both their standard and expanded band licenses should continue to be exempt from paying regulatory fees.\41\ We therefore propose adopting a section 9 regulatory fee obligation for all AM Expanded Band radio stations, beginning in FY 2014. We seek comment on this proposal.

      ---------------------------------------------------------------------------

      \40\ See Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Report and Order and Further Notice of Proposed Rulemaking, 73 FR 50203, paragraph 13 (August 26, 2008) (FY 2008 FNPRM).

      \41\ FY 2008 FNPRM, 73 FR 50203, paragraph 13 (August 26, 2008) (FY 2008 FNPRM).

      ---------------------------------------------------------------------------

  7. Second Further Notice of Proposed Rulemaking

    1. In this Second Further Notice of Proposed Rulemaking, we seek comment on additional proposals for regulatory fee reform. Several of the issues discussed below were previously raised by commenters but were not adopted because we either did not have the opportunity to fully evaluate the proposals or we determined that additional comments would be useful.\42\

      ---------------------------------------------------------------------------

      \42\ See supra paragraph 15.

      ---------------------------------------------------------------------------

    2. Our proposals to further reform the regulatory fee process involve

      Page 37987

      consideration of the following concepts: (1) Combining certain regulatory fee categories; (2) creating new fee categories; and/or (3) reallocating direct or indirect FTEs. In addition, we seek to make the regulatory fee calculation, collection, and appeal procedures more efficient, transparent, and user friendly. We also seek comment on adopting a cap on regulatory fee increases, increasing the de minimis threshold, eliminating some regulatory fee categories, and reexamining FTE allocations periodically.

      FTE Reallocations

    3. Enforcement Bureau and Consumer & Governmental Affairs Bureau

    4. We have historically considered the FTEs in the core bureaus to be direct FTEs for regulatory fee purposes. The FTEs in the non-core bureaus and offices have been considered ``indirect,'' and allocated as such across all Commission regulatory fee payors in proportion to their allocated share of the overall regulatory fee burden. We have not designated any FTEs outside the core bureaus as direct or used the FTEs of the non-core bureaus to determine regulatory fee allocations. Commenters, however, have suggested that the work of FTEs in two of the non-core bureaus--the Enforcement Bureau and CGB--is more focused on certain core bureau(s), and that reallocation of such indirect FTEs as ``direct'' for regulatory fee purposes may be appropriate.

    5. In our FY 2013 NPRM we sought comment on ``whether the work of indirect FTEs is focused disproportionately on one or more core bureaus, and if we should allocate indirect FTEs among the core bureaus on this basis.'' \43\ In response, SIA proposed that we reallocate Enforcement Bureau and CGB FTEs as direct FTEs to the Wireline Competition Bureau, Wireless Telecommunications Bureau, and Media Bureau.\44\ We seek comment on this proposal.

      ---------------------------------------------------------------------------

      \43\ FY 2013 NPRM, 78 FR 34619, paragraph 35 (June 10, 2013) (FY 2013 NPRM).

      \44\ SIA Comments at 10 (filed June 19, 2013).

      ---------------------------------------------------------------------------

    6. SIA's argument concerning reallocating indirect FTEs is based on the assumption that the FTEs in the Enforcement Bureau and CGB spend little time on matters affecting International Bureau regulatees. Based on our examination into the work done by these bureaus, we believe SIA's reallocation proposal deserves further consideration. The Enforcement Bureau regional and field offices, 114 FTEs, located throughout the Nation,\45\ are responsible for handling investigations and inspections in response to complaints (such as pirate radio complaints and wireless interference complaints) and conducting on-site inspections of radio facilities, cable systems, and antenna structures to determine compliance with applicable Commission rules.\46\ The regional and field offices also conduct wireless coordination with Canada and Mexico, to address potential wireless interference issues for wireless and broadcast services. Table 2, below, shows the change in FTE allocation if the Commission adopts this proposal and allocates the field and regional offices FTEs equally to the Wireless Telecommunications Bureau and the Media Bureau. We seek comment on this proposal, including the appropriate reallocations of FTEs between the two bureaus. In addition, the Enforcement Bureau \47\ as a whole (i.e., all the Enforcement Bureau divisions including the regional and field offices) \48\ is primarily focused on enforcement activity in the wireline, wireless, and broadcast or media industries, and only occasionally addresses Act and rule violations by International Bureau licensees.\49\ We seek comment on this proposal and also seek proposals concerning the appropriate percentages of FTEs among the three bureaus. Similarly, CGB,\50\ the bureau responsible for, among other things, processing informal consumer complaints, received a total of 316,430 informal complaints in 2013 of which 3,682 (approximately one percent of the total informal complaints) were filed against DBS providers; only a very small number of informal complaints dealt with issues handled by the International Bureau.\51\ We seek comment on this proposal and also seek other proposals concerning appropriate reallocation percentages of FTEs among the three bureaus.

      ---------------------------------------------------------------------------

      \45\ For the locations of the regional and field offices, see http://transition.fcc.gov/eb/rfo/.

      \46\ In FY 2013, the Enforcement Bureau database shows that investigations done by the regional and field offices were almost evenly split between wireless and broadcast-related cases. The regional and field offices' work involving wireline carriers is limited to disaster relief efforts. In addition, the regional and field offices as a whole employ one engineer responsible for addressing all of the Enforcement Bureau's satellite interference issues. Thus, the regional and field offices of the Enforcement Bureau devote nearly all of their work (with the exception of one FTE) to media/broadcast and wireless enforcement.

      \47\ The Enforcement Bureau has 262 FTEs as of September 30, 2013.

      \48\ The Enforcement Bureau consists of the following: Office of the Bureau Chief, the Investigations and Hearings Division, the Market Disputes Resolution Division, the Spectrum Enforcement Division, the Telecommunications Consumers Division, and the Regional and Field Offices (discussed above). The bureau's efforts are primarily focused on enforcement activity in the wireline, wireless, and broadcast or media industries.

      \49\ See, e.g., Intelsat License, LLC, Notice of Apparent Liability for Forfeiture, 28 FCC Rcd 17183 (2013) (apparent violation of Sec. 25.158(e) of the Commission's rules).

      \50\ CGB has 156 FTEs. The division responsible for informal complaints is the Consumer Inquiries and Complaints Division, with 55 FTEs. CGB develops and implements the Commission's consumer policies, including disability access issues; provides outreach and education to consumers; and responds to consumer inquiries and informal complaints. CGB also maintains partnerships with state, local, and Tribal governments on issues of emergency preparedness and implementation of new technologies.

      \51\ Although DBS providers are licensed by the International Bureau, the Media Bureau is responsible for overseeing DBS providers' compliance with the Commission's rules. Informal complaints filed by consumers against DBS providers could therefore be considered Media Bureau issues rather than International Bureau issues.

      ---------------------------------------------------------------------------

    7. The Commission also seeks comment on all aspects of SIA's proposal. In the process, the Commission asks commenters for input concerning whether our analysis accurately attributes the full range of work done by the Enforcement Bureau and CGB, and whether those two bureaus are more focused on licensees and regulatees of the Wireline Competition Bureau, Wireless Telecommunications Bureau, and Media Bureau than the International Bureau.\52\ Commenters should specify proposed reallocations concerning the Enforcement Bureau and CGB, and explain the legal and policy reasoning for such support.

      ---------------------------------------------------------------------------

      \52\ Please note that one of the CGB divisions, the Reference Information Center, contains public filings from all telecommunications industries, including International Space Station files.

      ---------------------------------------------------------------------------

    8. Office of Engineering & Technology and Other Reallocation Proposals

    9. The FCC recognizes that sometimes the work of the FTEs in a core or non-core bureau may affect the regulatees of another core bureau or bureaus. We seek comment on whether, in addition to those divisions affected by the proposed FTE reallocations discussed above, there are other divisions within the core or non-core bureaus that should be treated as direct FTEs to another bureau. For example, the Office of Engineering and Technology (OET) advises the Commission on technical and engineering matters, develops and administers Commission decisions regarding spectrum allocations, develops technical rules for the operation of unlicensed radio devices, authorizes the marketing of radio frequency devices as compliant with

      Page 37988

      Commission technical rules, grants experimental radio licenses, and is the agency's liaison to the National Telecommunications and Information Administration (NTIA) for coordinating policy decisions and frequency assignments between Federal agency and non-Federal spectrum users. OET also manages the FCC's program to perform broadband speed measurements and supports inter-bureau broadband projects such as the Technology Transitions Task Force. OET FTEs provide direct support to the equipment authorization and experimental radio licensing programs, as well as indirectly to the Commission's overall spectrum policy planning processes (e.g., spectrum allocations). We seek comment on whether and to what extent commenters believe OET's work is focused on the licensees and regulatees of the Wireless Telecommunications Bureau, Wireline Competition Bureau, Media Bureau, and International Bureau, and whether a portion of OET FTEs should be directly allocated to those bureaus for determining regulatory fees. Commenters should specify proposed reallocations and the legal and policy reasoning for such support.

    10. Of the proposals presented above, for illustrative purposes, the following Table 2 approximates the impact based on adopting two of these proposals--reallocating the CGB and EB regional and field offices--as direct to certain core bureaus.

      Table 2--Reallocating the CGB and EB Regional and Field Offices

      --------------------------------------------------------------------------------------------------------------------------------------------------------

      EB Regional and Field

      Bureau Current FTE Direct Current FTE Indirect CGB FTEs Offices FTEs FTE Total \53\

      --------------------------------------------------------------------------------------------------------------------------------------------------------

      International...................... 28 FTEs............... 47.5 FTEs............. 0 FTEs............... 0 FTEs............... 75.5 FTEs.

      (6.14%)............... (6.14%)............... (0.00%).............. (0.00%).............. (5.03%).

      Wireless........................... 93 FTEs............... 157.9 FTEs............ 52 FTEs.............. 57 FTEs.............. 359.9 FTEs.

      (20.39%).............. (20.39%).............. (33.33%)............. (50.00%)............. (24%).

      Wireline........................... 176 FTEs.............. 298.7 FTEs............ 52 FTEs.............. 0 FTEs............... 526.7 FTEs.

      (38.60%).............. (38.60%).............. (33.33%)............. (0.00%).............. (35.11%).

      Media.............................. 159 FTEs.............. 269.9 FTEs............ 52 FTEs.............. 57 FTEs.............. 537.9 FTEs.

      (34.87%).............. (34.87%).............. (33.33%)............. (50.00%)............. (35.86%).

      --------------------------------------------------------------------------------------------------------------------

      Total.......................... 456................... 774................... 156.................. 114.................. 1,500.

      --------------------------------------------------------------------------------------------------------------------------------------------------------

    11. Reallocations Within Fee Categories

    12. Submarine Cable. Submarine cable systems transport data, as well as voice services, for international carriers, Internet providers, wholesale operators, corporate customers, and governments. As discussed in the FY 2013 NPRM, international \53\ submarine cable service involves minimal regulation and oversight from the Commission after the initial licensing process.\54\ For example, such activity is limited to filing Traffic and Revenue Reports regarding international services and for U.S. facilities based international common carriers, and Circuit Status Reports.\55\ Several commenters in response to the FY 2013 NPRM suggested that the regulatory fees among International Bureau licensees should be adjusted to reflect this minimal oversight.\56\ The satellite operators and earth stations pay 59 percent of regulatory fees allocated to International Bureau licensees, and the submarine cable and bearer circuit fee categories pay 41 percent. The Commission tentatively concludes that it should revise the apportionment between the satellite/earth station operators and the submarine cable operators/terrestrial/satellite circuits to reduce the proportional allocation for submarine cable operators/terrestrial/satellite circuits and increase the allocation for satellite/earth station operators to more accurately reflect the amount of oversight and regulation for these industries.\57\

      ---------------------------------------------------------------------------

      \53\ This illustration is based on the adoption of the proposals to allocate the FTEs from the Enforcement Bureau Regional and Field offices and CGB.

      \54\ FY 2013 NPRM, 78 FR 34618-34619, paragraph 33 (June 10, 2013) (FY 2013 NPRM).

      \55\ Id.

      \56\ See, e.g., NASCA Comments at 8-9 (filed June 19, 2013); Telstra Comments at 2 (filed June 19, 2013); ICC Reply Comments at 2 (filed June 19, 2013).

      \57\ The revenue allocation between submarine cable operators and common carrier terrestrial/satellite circuits is 87.6 percent/

      12.4 percent. This was adopted in the Submarine Cable Order. See Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Second Report and Order, 74 FR 22104 (May 12, 2009) (Submarine Cable Order). The Commission does not propose any changes to the 87.6/12.4 allocation between submarine cable operators and common carrier terrestrial/satellite circuits.

      ---------------------------------------------------------------------------

    13. Earth Stations. An earth station transmits or receives messages from a satellite. Currently, earth station licensees pay regulatory fees of $275 per year while satellite operators pay $139,100 (for space stations, per operational system in geostationary orbit) and $149,875 (for space stations, per operational system in non-geostationary orbit) per year. The Commission recognizes that earth station and satellite oversight and regulation, although using different quantities of FTEs, is interdependent to some degree and also involves issues pertaining to non-U.S.-licensed space stations. Commenters suggest that the FCC increase the percentage of regulatory fees assigned to earth stations. We therefore seek comment on whether the Commission should increase this allocation in order to reflect more appropriately the regulation and oversight of this industry. Commenters should also discuss whether the type of earth station authorization should affect the relative allocation for regulatory fees. We invite comment on whether any material distinction should be drawn concerning the appropriate allocation of regulatory fees among various types of earth station authorizations.

      Improving the Regulatory Fee Process

    14. Following this analysis for FY 2014, how often should the Commission conduct an in depth review in the future? How often should this methodology be revisited for allocation of direct FTEs? Absent any changes in methodology, how often should the Commission update the number of FTEs in the core bureaus in order to calculate regulatory fees? Commenters should recommend an appropriate time frame, such as every three years, that balances the need for stability for industry sectors to budget for regulatory fees against the need to reflect the changing work of the Commission FTEs.

      Revising Our De Minimis Threshold and Eliminating Regulatory Fee Categories

    15. Under the Commission's present policy on de minimis regulatory fee payments, a regulatee is exempt from paying regulatory fees if the sum total of

      Page 37989

      all of its regulatory fee liabilities for the fiscal year is less than $10. For example, using FY 2013 fee data, an ITSP would be exempt if the total calendar year revenues did not exceed $2,881. A cell phone operator would be exempt if the number of subscribers did not exceed 55; a cable television operator would be exempt if the subscriber number did not exceed nine. The Commission proposes to increase the de minimis threshold to provide more relief to smaller entities. We seek comment on whether the Commission should establish a higher de minimis amount, such as $100, $500, $750, or $1,000. In doing so, we seek comment on whether the administrative burden on small regulatees and the FCC's operational costs associated with processing and collecting these fees outweigh the benefits of such payments. Commenters should discuss whether certain categories of licensees, such as those who are subject to frequency coordination by private industry groups, should be excluded from regulatory fees due to limited Commission regulation, among other things. Commenters should also discuss whether smaller entities with limited funds are more likely to be unable to budget for regulatory fees on a timely basis and therefore incur late fees and use more Commission resources for fee collection. In addition, commenters should address whether the Commission should phase in a higher de minimis threshold over two or more years.

    16. Similarly, we seek comment on whether to include certain fee categories (e.g., broadcast and multi-year licenses) in a new de minimis threshold. Commenters should discuss whether adding a new tier for broadcast, for smaller stations, would be feasible. Concerning multi-year licenses, the Commission proposes to exclude two categories whose regulatory fees for the term of the license would be under $100: Vanity call signs ($21.60 for a 10-year license) and General Mobile Radio Service (GMRS) ($25 for a five-year license).\58\ The Commission also seeks comment on eliminating certain other regulatory fee categories, such as Satellite TV, Satellite TV Construction Permits, Broadcast Auxiliaries, LPTV/Class A Television and FM Translators/

      Boosters, and CMRS Messaging (Paging), from regulatory fees because the categories account for such a small amount of regulatory fees. We seek comment on the benefits of discontinuing such collections. Commenters should discuss how other multi-year licenses should be treated with respect to a de minimis threshold. Since some licensees may hold many multi-year licenses, commenters should address whether it would be burdensome for such licensees to have some multi-year licenses above the de minimis threshold and some below.

      ---------------------------------------------------------------------------

      \58\ Our proposal would exclude these two categories from regulatory fees going forward, not just for FY 2014.

      ---------------------------------------------------------------------------

    17. The Commission tentatively concludes that eliminating categories from our regulatory fee schedule would be a permitted amendment as defined in section 9(b)(3) of the Act,\59\ and pursuant to section 9(b)(4)(B) must be submitted to Congress at least 90 days before it would become effective.\60\

      ---------------------------------------------------------------------------

      \59\ 47 U.S.C. 159(b)(3).

      \60\ 47 U.S.C. 159(b)(4)(B).

      ---------------------------------------------------------------------------

      A Cap or Limitation on Increases of Regulatory Fees for FY 2014

    18. For FY 2014, unlike last year, it is unlikely regulatees will experience substantial increases in their regulatory fees.\61\ Nevertheless, out of an abundance of caution, we seek comment on the appropriateness of a cap to prevent, ``unexpected, substantial increases which could severely impact the economic wellbeing of these licensees.'' \62\ We seek comment on whether to continue to apply a cap of 7.5 percent, or a higher cap, such as 10 percent, on the amount by which regulatory fee rates increase in FY 2014 over the FY 2013 fee rates, before rounding FY 2014 rates, for any category resulting solely from the reallocations of FTEs or our reform measures adopted in the FY 2013 Report and Order or in this proceeding.\63\ Therefore, if adopting our proposals would create a substantial increase in the fee rate for any category of regulatees, such an increased would be capped. We seek comment on the reasonableness of a 7.5 percent or 10 percent cap for FY 2014. The Commission also invites proposals for higher or lower percentages. Commenters suggesting a different cap should explain how such proposals would prevent a severe impact on the economic wellbeing of licensees yet remain consistent with the goal to more accurately align FTEs with their areas of work. A cap limiting increases, if adopted, would be effective for FY 2014.

      ---------------------------------------------------------------------------

      \61\ See, e.g., Table 1 at paragraph 18.

      \62\ See Assessment and Collection of Regulatory Fees for Fiscal Year 1997, Report and Order, 62 FR 37414, paragraph 37 (July 11, 1997) (FY 1997 Report and Order).

      \63\ This cap would apply to an increase to an entire fee category as a result of FTE reallocations or reform measures; such cap would not apply to limit changes in regulatory fees for a particular payor resulting from other factors, such as increased or decreased revenues, changes in subscriber numbers, number of licenses, etc. For example, UHF television fees in Markets 1-10 will increase from $38,000 (FY 2013) to $44,875 (FY 2014) as a result of our regulatory reform measure in combining the UHF and VHF fee categories.

      ---------------------------------------------------------------------------

      Additional Regulatory Fee Reform

    19. We also seek comment on ways to further improve our regulatory fee process to make it less burdensome for all entities, specifically smaller entities. The Commission recognizes that the FCC is currently seeking comment on a Commission-wide ``Process Reform.'' \64\ Any comments relating specifically to the regulatory fee processes could also be filed in this docket for implementation for FY 2014 and the suggestions will be coordinated with the Process Reform proceeding. Commenters should suggest ways in which the Commission can further streamline its processes to make it easier for regulatory fee payors. Commenters should also address the timing of our annual regulatory fee process. Commenters should suggest ways in which the FCC can improve its Web site to make it easier for the public to obtain information about regulatory fees. Making regulatory fee waiver decisions public and accessible on our Web site is also a Commission proposal. We seek comment on the feasibility of an automated online waiver process. We seek comment on other ways to make information more accessible on the Commission's Web site.

      ---------------------------------------------------------------------------

      \64\ http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0214/DA-14-199A2.pdf.

      ---------------------------------------------------------------------------

      Combining Existing Regulatory Fee Categories

    20. In the FY 2013 NPRM, the Commission sought comment on combining wireline and wireless voice services into one category and assessing regulatory fees based on voice revenues for this new category.\65\ The Commission explained that because wireless services are comparable to wireline services, both services encompass similar regulatory policies and programs, such as universal service and number portability.\66\ The Independent Telephone and Telecommunications Alliance (ITTA) contends that wireline companies bear a disproportionately high burden in

      Page 37990

      regulatory fees because these companies no longer require the same expenditure of Commission resources as when regulatory fees were first adopted.\67\ ITTA further observes that issues addressed by FTEs in the Wireline Competition Bureau also affect the providers of other voice services, such as wireless and VoIP; for example, the Wireline Competition Bureau oversees contributions to the universal service fund by wireless providers and programs that benefit and provide disbursements to wireless providers, such as Lifeline, high-cost, and E-rate.\68\

      ---------------------------------------------------------------------------

      \65\ FY 2013 NPRM, 78 FR 34615, paragraph 18 (June 10, 2013) (FY 2013 NPRM). See, e.g., ITTA Comments at 2-3 (filed June 19, 2013). ITTA's proposal was also discussed in the FY 2008 FNPRM, 73 FR 50288-50289, paragraphs 16-17 (August 26, 2008 (FY 2008 FNPRM). In that proceeding, the Commission stated that ``ITTA recommends that the Commission extend the process by which it added interconnected Voice over Internet Protocol (`VoIP') providers to the ITSP category and also include wireless providers in the ITSP category.'' Id., 73 FR 50288-50289, paragraph 16 (August 26, 2008) (FY 2008 FNPRM).

      \66\ FY 2013 NPRM, 78 FR 34615, paragraph 18 (June 10, 2013) (FY 2013 NPRM).

      \67\ ITTA Comments at 4 (filed June 19, 2013).

      \68\ 47 CFR 54.706; Schools and Libraries Universal Support Mechanism, Eligible Services List, CC Docket No. 02-6, GN Docket No. 09-51, Order, 28 FCC Rcd 14534 (WCB 1993); Federal Communications Commission Consumer Guide, Lifeline: Affordable Telephone Service for Income-Eligible Consumers (2013), available at http://transition.fcc.gov/cgb/consumerfacts/lllu.pdf; Connect America Fund, et al., WC Docket No. 10-90, Report and Order and Further Notice of Proposed Rulemaking, 77 FR 1637 (January 11, 2012), petitions for review pending sub nom, In Re Federal Communications Commission 11-

      161, No. 11-9900 (10th Cir, filed December 18, 2011).

      ---------------------------------------------------------------------------

    21. We seek comment on combining wireless cellular services with the ITSP category to create one regulatory fee category whose regulatory fees are calculated based on the combined number of FTEs in the Commission's Wireline Competition Bureau and Wireless Telecommunications Bureau. We also seek comment on whether the Commission should combine any portion of other service categories with ITSP. Any combination of categories proposed by commenters should address the need to reconcile different assessment methodologies for ITSP, which pay fees based on revenues and wireless, which pay fees based on handsets. If ITSP is combined with another category, a uniform method would need to be applied to calculate the fees (e.g., revenues, subscribers, handsets, telephone numbers). Commenters should propose and discuss uniform methods for calculating regulatory fees in a combined regulatory fee category. Although revenues appear to be the most appealing methodology because this information is available in FCC Form 499 filings and is already used in other FCC programs to determine obligations, such as universal service contributions, commenters advocating using revenues for assessing regulatory fees in a combination of categories should take into account whether all revenues should be assessed, or whether only the proportion of revenues allocated to voice be used.\69\

      ---------------------------------------------------------------------------

      \69\ Commenters advocating using revenues for assessing regulatory fees in a combination of services should take into account that wireless carriers provide ``voice'' service without charge for customers with data plans.

      ---------------------------------------------------------------------------

    22. Depending on the revenues that are included in the base, combining wireless cellular and the historic ITSP fee categories together could result in a sizeable change in the wireline regulatory fee rate. We seek comment on transitioning to a combined category and capping any increase to 7.5 or 10 percent, annually. It is possible that by combining the wireless cellular and ITSP fee categories into a new category as proposed by ITTA, the effect of a cap on increases, and the reduction in fees for the wireline industry, could cause significant fee increases for the remaining regulatory fee categories. Alternatively, the Commission could transition by keeping wireless and ITSP separate categories based on revenue and phasing in an increase in wireless and decrease in ITSP fee rates before combining the two categories.\70\ We seek comment on ways to transition to a combined wireless and wireline category without causing hardship on the wireless industry and other fee categories.

      ---------------------------------------------------------------------------

      \70\ By way of illustration, if the increase were capped at 10%, the cellular wireless projected regulatory fee revenue would increase from approximately $58.9M to $64.8M for FY 2014, to $71.3M for FY 2015, to $78.4M for FY 2016, to $86.2 for FY 2017, and to $94.9M for FY 2018, at which point the two categories would be combined into one ITSP category. During this phase-in process, the wireline regulatory fee revenues would decrease each year, from approximately $131.2M to $125.3M for FY 2014, to $118.8M for FY 2015, to $111.7M for FY 2016, to $103.8M for FY 2017, and to $95.2M in FY 2018.

      ---------------------------------------------------------------------------

    23. For example, if the cellular wireless and ITSP fee categories were combined into one fee category based on 499-A revenues, the fee rate and collections amount would be projected as follows.

      Table 3--Combined Wireless and ITSP Fee Rate and Projected Revenue

      Without cap

      --------------------------------------------------------------------------------------------------------------------------------------------------------

      % of rev.

      Revenue source (FCC Form 499-A 2013 revenue) 499-A projected Combined rev. Estim. revenue collected Diff. paid w/

      revenue 2014 fee rate collected (percent) combined rate

      --------------------------------------------------------------------------------------------------------------------------------------------------------

      ITSP............................................................... $38,800,000,000 .00287 $111,356,000 32.77 ($20,569,314)

      Wireless (Cellular)................................................ 27,715,500,000 .00287 79,543,485 23.41 20,139,689

      ------------------------------------------------------------------------------------

      Total.......................................................... 66,515,500,000 .............. 190,899,485 56.18 ................

      --------------------------------------------------------------------------------------------------------------------------------------------------------

      Note: The combined revenue fee rate of .00287 was calculated on an ITSP allocation (FTE) percentage of 38.60% and a cellular wireless percentage of 17.34%.

    24. The Commission tentatively concludes that combining two fee categories into one new fee category constitutes a reclassification of services in the regulatory fee schedule, and thus a permitted amendment as defined in section 9(b)(3) of the Act,\71\ which pursuant to section 9(b)(4)(B) must be submitted to Congress at least 90 days before it becomes effective.\72\

      ---------------------------------------------------------------------------

      \71\ 47 U.S.C. 159(b)(3).

      \72\ 47 U.S.C. 159(b)(4)(B).

      ---------------------------------------------------------------------------

      New Regulatory Fee Categories

    25. DBS

    26. DBS providers are multichannel video programming distributors (MVPDs), pursuant to section 522(13) of the Act. These operators of U.S.-licensed geostationary space stations used to provide one way subscription television service to consumers in the United States pay a fee under the category ``Space Station (Geostationary Orbit)'' in the regulatory fee schedule. Such providers of one-way subscription satellite television service to consumers in the United States do not pay a per-subscriber regulatory fee. DBS services are similar to cable services because both services offer multi-channel video programming to end-users. DBS services, however, also differ from cable because programming is transmitted to end users by satellites stationed in geosynchronous orbit and not by terrestrial cable.

    27. Commenters, in response to the FY 2013 NPRM, proposed that DBS providers pay regulatory fees based on Media Bureau FTEs due to the similar regulatory work devoted to cable

      Page 37991

      operators and DBS providers.\73\ For example, DBS providers (and cable operators) are permitted to file program access complaints \74\ and complaints seeking relief under the retransmission consent good faith rules; \75\ and DBS providers are required to comply with Media Bureau oversight and regulation such as Commercial Advertisement Loudness Mitigation Act (CALM Act),\76\ the Twenty-First Century Video Accessibility Act (CVAA),\77\ and the closed captioning and video description rules.\78\ DBS providers argue, however, that they are not cable television operators and they are not subject to all of the regulations historically imposed on the cable industry by the Media Bureau; instead, their business model is based on satellite technology and is subject to satellite licensing rules through the International Bureau.\79\

      ---------------------------------------------------------------------------

      \73\ Previously, when this issue was first proposed by the cable industry, the Commission declined to modify its methodology. See, e.g., FY 2013 NPRM, 78 FR 34627-34628, paragraphs 56-58 (June 10, 2013) (FY 2013NPRM); FY 2008 FNPRM, 73 FR 50290, paragraph 26 (August 26, 2008) (FY 2008 FNPRM). For FY 2014, a new category was adopted that includes cable television and IPTV. We now seek further comment whether DBS providers should also be included in the cable television and IPTV category.

      \74\ 47 U.S.C. 548; 47 CFR 76.1000-1004.

      \75\ 47 U.S.C. 325(b)(1), (3)(C)(ii); 47 CFR 76.65(b).

      \76\ See Implementation of the Commercial Advertisement, Loudness Mitigation (CALM) Act, Report and Order, 77 FR 40276 (July 9, 2012) (2012).

      \77\ 47 U.S.C. 618(b).

      \78\ 47 CFR part 79.

      \79\ See, e.g., DIRECTV Comments at 8-17 (filed June 19, 2013); EchoStar Corporation and DISH Network Reply Comments at 4-6 (filed June 26, 2013).

      ---------------------------------------------------------------------------

    28. The Commission invites further comment on whether regulatory fees paid by DBS providers should be included in the cable television and IPTV category and assessed in the same manner as cable television system operators. We also seek comment on a new name for this category. For example, should this fee category be named ``MVPD'' or ``subscription television fees'' or should other names be more appropriate for this category? We also ask commenters to further address the impact of this on the cable industry and the satellite industry.

      Table 4--Change in Cable/IPTV Regulatory Fees When DBS Added

      --------------------------------------------------------------------------------------------------------------------------------------------------------

      FY 14 fee per Projected

      Fee service Subscriber subscriber FY 14 fee not combined revenue Projected rev. Diff. paid

      count combined combined not combined with combined

      --------------------------------------------------------------------------------------------------------------------------------------------------------

      Cable/IPTV Subscribers.................... 65,400,000 $.68 $1.00 per subscriber........ $44,472,000 $65,400,000 ($20,928,000)

      DBS Subscribers........................... 34,000,000 .68 114,025 per satellite....... 23,120,000 2,052,450 21,067,550

      -------------------------------------------------------------------------------------------------------------

      Total................................. 99,400,000 .............. ............................ 67,592,000 67,452,450 ..............

      --------------------------------------------------------------------------------------------------------------------------------------------------------

    29. When DBS video providers are included in the cable and IPTV subscriber count, the FY 2014 regulatory fee rate for cable television (and IPTV and DBS video service) reduces from a fee rate of $1.00 per subscriber (cable and IPTV subscribers) to $.68 per subscriber. This would affect only the 18 satellites that provide video programming, EchoStar and DIRECTV. The GSO Space Stations will be reduced by 18 satellites, and $2.5 million in projected revenue. This would add $2.5 million to cable's projected revenue, i.e., 34,000,000 new subscribers, totaling 99,400,000 subscribers.

    30. One-way satellite television subscription service is provided by a variety of satellites in the United States.\80\ As a result, there are multiple definitions of DBS in the Commission's rules.\81\ Commenters should also explain how they would define DBS satellite television service providers for regulatory fee purposes.

      ---------------------------------------------------------------------------

      \80\ For example, DIRECTV operates a number of Ka-band satellites used to provide satellite television services to consumers in the United States in addition to its fleet of DBS satellites.

      \81\ Compare definition of DBS in Sec. 25.103 used for satellite licensing with the definition for DBS in Sec. 25.701 used for other public interest obligations. 47 CFR 25.103, 25.701.

      ---------------------------------------------------------------------------

    31. Commenters should also discuss the relationship between regulatory fees that would be paid by DBS satellite television service providers and the regulatory fees paid by operators of GSO satellites, which are used to provide satellite television service to consumers in the United States. At the same time, the Commission recognizes that non-U.S.-licensed satellites are also used to provide one-way satellite television service to consumers in the United States, but do not pay a regulatory fee.\82\ Commenters may wish to address this point in any discussion of the relationship between the two fee categories and the impact of this fee category on the satellite industry.

      ---------------------------------------------------------------------------

      \82\ See, e.g., EchoStar Satellite, LLC, Order and Authorization, 20 FCC Rcd 20083 (International Bureau 2005).

      ---------------------------------------------------------------------------

    32. Non-U.S.-Licensed Space Stations Serving the United States

    33. To recover the costs associated with policy and rulemaking activities associated with space stations, Sec. 1.1156 of the Commission's rules includes ``Space Station (Geostationary Orbit)'' and ``Space Stations (Non-Geostationary Orbit)'' in the regulatory fee schedule.\83\ These fees are assessed only for U.S.-licensed space stations. Regulatory fees are not assessed for non-U.S.-licensed space stations that have been granted access to the market in the United States.\84\ Previously, the Commission sought comment on a proposal to assess regulatory fees on non-U.S.-licensed space stations that had been granted market access in the United States, and this discussion is incorporated in this rulemaking by reference.\85\ Intelsat supports creating this new category.\86\ Most commenters addressing this issue do not support assessing regulatory fees on non-U.S.-licensed satellites and contend that the Commission does not have authority to do so; such fees would conflict with international treaties; and that a fee assessment could lead to a proliferation of fees from other countries that would have a serious impact on global satellite services.\87\

      ---------------------------------------------------------------------------

      \83\ 47 CFR 1.1156.

      \84\ This issue was raised in the FY 1999 Report and Order where the Commission observed that that the legislative history provides that only space stations licensed under Title III--which does not include non-U.S.-licensed satellite operators--may be subject to regulatory fees. Assessment and Collection of Regulatory Fees for Fiscal Year 1999, Report and Order, 64 FR 35837, paragraph 39 (July 1, 1999) (FY 1999 Report and Order).

      \85\ See FY 2013 NPRM, 78 FR 34627, paragraphs 53-55 (June 10, 2013) (FY 2013 NPRM).

      \86\ Intelsat Comments (June 19, 2013).

      \87\ See, e.g., EchoStar Corporation and DISH Network Comments at 15-18 (contending that the Commission lacks the authority to impose such regulatory fees and that doing so would also be inconsistent with established multilateral trade agreements) (June 19, 2013); SES Americom, Inc., Inmarsat, Inc., and Telesat Canada Comments at 2-12) (June 19, 2013).

      ---------------------------------------------------------------------------

    34. The Commission also seeks additional comment on whether regulatory fees should be assessed on non-U.S. licensed space station operators granted access to the market

      Page 37992

      in the United States. Commenters should discuss whether the Commission should revisit the Commission's 1999 conclusion that the regulatory fee category for Space Stations (Geostationary Orbit) and Space Stations (Non-Geostationary Orbit) in Sec. 1.1156(a) of the Commission's rules covers only Title III license holders, including the Commission's finding that it ``cannot include operators of non-U.S.-licensed satellite space stations among regulatory fee payors.'' \88\ Commenters should also discuss any negative policy implications that may arise from taking such action, such as the likelihood that other countries will choose to assess fees on U.S.-licensed satellite systems. Table 5 below illustrates the number of feeable (U.S. licensed) versus non-

      feeable (non-U.S. licensed) satellites that require agency resources to be expended.

      ---------------------------------------------------------------------------

      \88\ FY 1999 Report and Order, 64 FR 35837, paragraph 39 (July 1, 1999) (FY 1999 Report and Order).

      Table 5--Projected Number of Satellites That Are Regulatory Feeable and Non-Feeable

      ----------------------------------------------------------------------------------------------------------------

      Regulatory Market access

      feeable GSO & list (not K-Band list (not ISAT list (not Permitted list Total (not

      NGSO satellites feeable) feeable) feeable) (not feeable) feeable)

      ----------------------------------------------------------------------------------------------------------------

      100 19 6 6 38 69

      ----------------------------------------------------------------------------------------------------------------

    35. Commenters advocating the assessment of regulatory fees on non-

      U.S.-licensed space stations granted access to the market in the United States should propose how the fees should be calculated and applied. Because market access is granted through a variety of procedural mechanisms, commenters should address each situation. For example, how would fees be calculated and applied in instances where the non-U.S.-

      licensed space station operator accesses the U.S. market solely through grant of an application by a U.S.-licensed earth station operator identifying the non-U.S. licensed space station as a point of communication? Commenters should also provide specific information as to whether other countries already assess fees in one form or another on U.S.-licensed satellite systems accessing their markets.

    36. Based on Commission filings over the past three years, there were eleven applications filed each year for U.S. space station authorization, eight applications per year to add a non-U.S.-licensed space station to the Permitted List, and ten applications per year from U.S. earth stations to communicate with non-U.S.-licensed space stations that are not on the Permitted List. Thus, over half of the space station applications and notifications during this three year period pertained to non-U.S.-licensed space stations. As Intelsat observes, ``the Satellite Division's work on behalf of non-U.S.-

      licensed satellite operators with U.S. market access generates regulatory costs.'' \89\ As an alternative to adopting a new regulatory fee category for non-U.S.-licensed space stations, as discussed above, FTEs working on petitions or other matters involving non-U.S.-licensed satellites could be removed from the regulatory fee assessments for U.S.-licensed satellites and considered indirect for regulatory fee purposes. We seek comment on whether these FTEs should be considered indirect FTEs because their responsibilities concerning non-U.S.-

      licensed satellite operators are of general benefit to the United States public, as well as other entities, including the United States government, who uses these satellite services. Indirect treatment may be further warranted because U.S. earth stations utilize these foreign satellites. We seek comment on whether these FTEs should be considered ``indirect'' FTEs instead of direct International Bureau FTEs.

      ---------------------------------------------------------------------------

      \89\ Intelsat Comments at 4 (June 19, 2013).

      ---------------------------------------------------------------------------

    37. Toll Free Numbers

    38. The Commission also seeks comment on whether toll free numbers, as defined in Sec. 52.101(f) of our rules,\90\ should be added to the regulatory fee schedule set forth in section 9. Toll free numbers are not currently subject to regulatory fees. These numbers are managed by a RespOrg, or Responsible Organization, for toll free subscribers. Commission resources are used in enforcement activities,\91\ as well as rulemakings and other policy making proceedings,\92\ pertaining to the use of these numbers. Historically, the Commission has not assessed regulatory fees on toll free numbers, under the rationale that the entities controlling the numbers, wireline and wireless carriers, were paying regulatory fees based on either revenues or subscribers.\93\ This may no longer be a realistic assumption today as there appear to be many toll free numbers controlled or managed by entities that are not carriers. We therefore seek comment on whether regulatory fees should be assessed on RespOrgs, for each toll free number managed by a RespOrg. We seek comment on whether regulatory fees should be assessed on working, assigned, and reserved toll free numbers. In addition, should regulatory fees be assessed for toll free numbers that are in the ``transit'' status, or any other status as defined in Sec. 52.103 of the Commission's rules? Commenters should discuss an appropriate regulatory fee for this new category; e.g., one cent per month, or twelve cents per year. Using this figure, the amount of fees collected could total approximately $4 million per year, depending on how many toll free numbers continued to be managed by RespOrgs if the regulatory fee were to be imposed. The FTEs involved in toll free issues are primarily from the Wireline Competition Bureau; \94\ therefore, this additional fee would reduce the ITSP regulatory fee total.

      ---------------------------------------------------------------------------

      \90\ Toll free numbers are telephone numbers for which the toll charges for completed calls are paid by the toll free subscriber. See 47 CFR 52.101(f).

      \91\ See, e.g., Richard Jackowitz, IT Connect, Inc., Notice of Apparent Liability for Forfeiture, 29 FCC Rcd 3318 (2014); Richard Jackowitz, IT Connect, Inc., Notice of Apparent Liability for Forfeiture, 28 FCC Rcd 6692 (2013); Telseven, LLC, et al., Notice of Apparent Liability for Forfeiture, 27 FCC Rcd 15558 (2013).

      \92\ See, e.g., Toll Free Access Codes, Second Report and Order and Further Notice of Proposed Rulemaking, 62 FR 20126 (April 25, 1997); 62 FR 20147 (April 25, 1997) (1997).

      \93\ See generally, Universal Service Contribution Methodology, Further Notice of Proposed Rulemaking, 77 FR 33923, paragraph 227 (June 7, 2012) (2012).

      \94\ Enforcement Bureau staff also work on toll free issues.

      ---------------------------------------------------------------------------

    39. Permitted Amendments

    40. The Commission tentatively concludes that including the three categories discussed above: DBS, non-U.S.-licensed space stations, and toll free numbers, in new or revised regulatory fee categories would constitute a reclassification of services in the regulatory fee schedule as defined in section 9(b)(3) of the Act,\95\ and

      Page 37993

      pursuant to section 9(b)(4)(B) must be submitted to Congress at least 90 days before it becomes effective.\96\

      ---------------------------------------------------------------------------

      \95\ 47 U.S.C. 159(b)(3).

      \96\ 47 U.S.C. 159(b)(4)(B).

      ---------------------------------------------------------------------------

  8. Procedural Matters

    Payment of Regulatory Fees

    1. In order to help regulatory fee payors better understand the process for payment of regulatory fees, the Commission restates important information below.

    2. Manner of Payment

    3. As of October 1, 2013, the Commission no longer accepts checks (including cashier's checks) and the accompanying hardcopy forms (e.g., Form 159's, Form 159-B's, Form 159-E's, Form 159-W's) for payment of regulatory fees. All payments must now be made by online ACH payment, online credit card, or wire transfer. Any other form of payment (e.g., checks) will be rejected and sent back to the payor. So that the Commission can associate the wire payment with the correct regulatory fee information, an accompanying Form 159-E must still be transmitted via fax for wire transfers.\97\

      ---------------------------------------------------------------------------

      \97\ We incorporate this change into our rules at Table F.

      ---------------------------------------------------------------------------

    4. Lock Box Bank

    5. All lock box payments to the Commission for FY 2014 will be processed by U.S. Bank, St. Louis, Missouri, and payable to the FCC. During the fee season for collecting FY 2014 regulatory fees, regulatees can pay their fees by credit card through Pay.gov,\98\ by ACH or debit card,\99\ or by wire transfer. Additional payment options and instructions are posted at http://transition.fcc.gov/fees/regfees.html.

      ---------------------------------------------------------------------------

      \98\ In accordance with U.S. Treasury Financial Manual Announcement No. A-2012-02, the U.S. Treasury will reject credit card transactions greater than $49,999.99 from a single credit card in a single day. This includes online transactions conducted via Pay.gov, transactions conducted via other channels, and direct-over-

      the counter transactions made at a U.S. Government facility. Individual credit card transactions larger than the $49,999.99 limit may not be split into multiple transactions using the same credit card, whether or not the split transactions are assigned to multiple days. Splitting a transaction violates card network and Financial Management Service (FMS) rules. However, credit card transactions exceeding the daily limit may be split between two or more different credit cards. Other alternatives for transactions exceeding the $49,999.99 credit card limit include payment by check, electronic debit from your bank account, and wire transfer.

      \99\ In accordance with U.S. Treasury Financial Manual Announcement No. A-2012-02, the maximum dollar-value limit for debit card transactions will be eliminated. It should also be noted that only Visa and MasterCard branded debit cards are accepted by Pay.gov.

      ---------------------------------------------------------------------------

    6. Receiving Bank for Wire Payments

    7. The receiving bank for all wire payments is the Federal Reserve Bank, New York, New York (TREAS NYC). So that the processing bank can properly associate the wire payment with the fee payment details, regulatees making a wire transfer must fax a copy of their Fee Filer generated Form 159-E to U.S. Bank, St. Louis, Missouri at (314) 418-

      4232 at least one hour before initiating the wire transfer (but on the same business day) so as not to delay crediting their account. The use of the Form 159-E is permissible with wire transfer. Regulatees should discuss arrangements (including bank closing schedules) with their bankers several days before they plan to make the wire transfer to allow sufficient time for the transfer to be initiated and completed before the deadline. Complete instructions for making wire payments are posted at http://transition.fcc.gov/fees/wiretran.html.

    8. De Minimis Regulatory Fees

    9. Regulatees whose total FY 2014 regulatory fee liability, including all categories of fees for which payment is due, is less than an established de minimis amount are exempted from payment of FY 2014 regulatory fees. The de minimis amount to date has been $10 (ten dollars); however, such amount could change as a result of this Notice.

    10. Standard Fee Calculations

    11. The Commission will accept fee payments made in advance of the window for the payment of regulatory fees. The responsibility for payment of fees by service category is as follows:

      Media Services: Regulatory fees must be paid for initial construction permits that were granted on or before October 1, 2013 for AM/FM radio stations, VHF/UHF full service television stations, and satellite television stations. Regulatory fees must be paid for all broadcast facility licenses granted on or before October 1, 2013. In instances where a permit or license is transferred or assigned after October 1, 2013, responsibility for payment rests with the holder of the permit or license as of the fee due date.

      Wireline (Common Carrier) Services: Regulatory fees must be paid for authorizations that were granted on or before October 1, 2013. In instances where a permit or license is transferred or assigned after October 1, 2013, responsibility for payment rests with the holder of the permit or license as of the fee due date. Audio bridging service providers are included in this category.\100\

      ---------------------------------------------------------------------------

      \100\ Audio bridging services are toll teleconferencing services.

      ---------------------------------------------------------------------------

      Wireless Services: CMRS cellular, mobile, and messaging services (fees based on number of subscribers or telephone number count): Regulatory fees must be paid for authorizations that were granted on or before October 1, 2013. The number of subscribers or telephone numbers on December 31, 2013 will be used as the basis for calculating the fee payment. In instances where a permit or license is transferred or assigned after October 1, 2013, responsibility for payment rests with the holder of the permit or license as of the fee due date.

      The first eleven regulatory fee categories in our Schedule of Regulatory Fees (see Table B) pay ``small multi-year wireless regulatory fees.'' Entities pay these regulatory fees in advance for the entire amount of their five-year or ten-year term of initial license, and only pay regulatory fees again when the license is renewed or a new license is obtained. These fee categories are included in our Schedule of Regulatory Fees to publicize our estimates of the number of ``small multi-year wireless'' licenses that will be renewed or newly obtained in FY 2014.

      Multichannel Video Programming Distributor Services (cable television operators and CARS licensees) and Internet Protocol Television (IPTV): Regulatory fees must be paid for the number of basic cable television subscribers as of December 31, 2013.\101\ In addition, beginning in FY 2014, IPTV providers that had subscribers as of December 31, 2013 are also obligated to pay regulatory fees. Holders of CARS licenses that were granted on or before October 1, 2013 must also pay regulatory fees. In instances where a permit or license is transferred or assigned after October 1, 2013, responsibility for payment rests with the holder of the permit or license as of the fee due date.

      ---------------------------------------------------------------------------

      \101\ Cable television system operators should compute their number of basic subscribers as follows: Number of single family dwellings + number of individual households in multiple dwelling unit (apartments, condominiums, mobile home parks, etc.) paying at the basic subscriber rate + bulk rate customers + courtesy and free service. Note: Bulk-Rate Customers = Total annual bulk-rate charge divided by basic annual subscription rate for individual households. Operators may base their count on ``a typical day in the last full week'' of December 2013, rather than on a count as of December 31, 2013.

      ---------------------------------------------------------------------------

      International Services: Regulatory fees must be paid for earth stations that were authorized (licensed) on or before October 1, 2013. Geostationary orbit

      Page 37994

      space stations and non-geostationary orbit satellite systems that were licensed and operational on or before October 1, 2013 are subject to regulatory fees. In instances where a permit or license is transferred or assigned after October 1, 2013, responsibility for payment rests with the holder of the permit or license as of the fee due date.

      International Services: Submarine Cable Systems: Regulatory fees for submarine cable systems are to be paid on a per cable landing license basis based on circuit capacity as of December 31, 2013. In instances where a license is transferred or assigned after October 1, 2013, responsibility for payment rests with the holder of the license as of the fee due date. For regulatory fee purposes, the allocation in FY 2014 will remain at 87.6 percent for submarine cable and 12.4 percent for satellite/terrestrial facilities.

      International Services: Terrestrial and Satellite Services: Regulatory fees for International Bearer Circuits are to be paid by facilities-based common carriers that have active (used or leased) international bearer circuits as of December 31, 2013 in any terrestrial or satellite transmission facility for the provision of service to an end user or resale carrier, which includes active circuits to themselves or to their affiliates. In addition, non-common carrier satellite operators must pay a fee for each circuit sold or leased to any customer, including themselves or their affiliates, other than an international common carrier authorized by the Commission to provide U.S. international common carrier services. ``Active circuits'' for these purposes include backup and redundant circuits as of December 31, 2013. Whether circuits are used specifically for voice or data is not relevant for purposes of determining that they are active circuits. In instances where a permit or license is transferred or assigned after October 1, 2013, responsibility for payment rests with the holder of the permit or license as of the fee due date. For regulatory fee purposes, the allocation in FY 2014 will remain at 87.6 percent for submarine cable and 12.4 percent for satellite/terrestrial facilities.

      Clarification regarding DTV Replacement Translators. Because these TV translators do not extend the coverage of the primary station, but operate solely within the primary station's protected contour, these special TV translators are deemed to be ``replacement translators'' and are not subject to a separate TV translator regulatory fee.

      Clarification regarding TV Translator/Booster Facilities Operating in Analog, Digital, or in an Analog/Digital Simulcast Mode. With respect to Low Power, Class A, and TV Translator/Booster facilities that may be operating in analog, digital, or in an analog and digital simulcast mode, the Commission assesses a fee for each facility operating either in an analog or digital mode. In instances in which a licensee is simulcasting in both analog and digital modes, a single regulatory fee will be assessed for the analog facility and its corresponding digital component, but not for both facilities.

      Enforcement

    12. To be considered timely, regulatory fee payments must be received and stamped at the lockbox bank by the due date of regulatory fees. Section 9(c) of the Act requires us to impose a late payment penalty of 25 percent of the unpaid amount to be assessed on the first day following the deadline date for filing of these fees.\102\ Failure to pay regulatory fees and/or any late penalty will subject regulatees to sanctions, including those set forth in Sec. 1.1910 of the Commission's rules \103\ and in the Debt Collection Improvement Act of 1996 (DCIA).\104\ The Commission also assesses administrative processing charges on delinquent debts to recover additional costs incurred in processing and handling the related debt pursuant to the DCIA and Sec. 1.1940(d) of the Commission's rules.\105\ These administrative processing charges will be assessed on any delinquent regulatory fee, in addition to the 25 percent late charge penalty. In case of partial payments (underpayments) of regulatory fees, the payor will be given credit for the amount paid, but if it is later determined that the fee paid is incorrect or not timely paid, then the 25 percent late charge penalty (and other charges and/or sanctions, as appropriate) will be assessed on the portion that is not paid in a timely manner.

      ---------------------------------------------------------------------------

      \102\ 47 U.S.C. 159(c).

      \103\ See 47 CFR 1.1910.

      \104\ Delinquent debt owed to the Commission triggers application of the ``red light rule'' which requires offsets or holds on pending disbursements. 47 CFR 1.1910. In 2004, the Commission adopted rules implementing the requirements of the DCIA. See Amendment of parts 0 and 1 of the Commission's rules, MD Docket No. 02-339, Report and Order, 69 FR 27843 (May 17, 2004) (2004); 47 CFR part 1, subpart O, Collection of Claims Owed the United States.

      \105\ 47 CFR 1.1940(d).

      ---------------------------------------------------------------------------

    13. The Commission will withhold action on any application or other requests for benefits filed by anyone who is delinquent in any non-tax debts owed to the Commission (including regulatory fees) and will ultimately dismiss those applications or other requests if payment of the delinquent debt or other satisfactory arrangement for payment is not made.\106\ Failure to pay regulatory fees may also result in the initiation of a proceeding to revoke any and all authorizations held by the entity responsible for paying the delinquent fee(s).

      ---------------------------------------------------------------------------

      \106\ See 47 CFR 1.1161(c), 1.1164(f)(5), and 1.1910.

      ---------------------------------------------------------------------------

  9. Additional Tables

    Table A--Calculation of FY 2014 Revenue Requirements and Pro-Rata Fees

    Regulatory Fees for the First Ten Categories Below Are Collected by the Commission in Advance To Cover the Term of the License and Are Submitted at the

    Time the Application Is Filed

    --------------------------------------------------------------------------------------------------------------------------------------------------------

    FY 2013 Pro-rated FY Computed new Rounded new FY

    Fee category FY 2014 payment Years revenue 2014 revenue FY 2014 2014 Expected FY

    units estimate requirement regulatory fee regulatory fee 2014 revenue

    --------------------------------------------------------------------------------------------------------------------------------------------------------

    PLMRS (Exclusive Use)..................... 1,700 10 560,000 578,582 34 35 595,000

    PLMRS (Shared use)........................ 30,000 10 2,250,000 2,768,930 9 10 3,000,000

    Microwave................................. 17,000 10 2,640,000 2,727,603 16 15 2,550,000

    218-219 MHz (Formerly IVDS)............... 5 10 3,750 4,133 83 85 4,250

    Marine (Ship)............................. 5,200 10 655,000 909,201 17 15 780,000

    GMRS...................................... 8,900 5 197,500 330,619 7 5 222,500

    Aviation (Aircraft)....................... 4,200 10 290,000 413,273 10 10 420,000

    Marine (Coast)............................ 300 10 156,750 165,309 55 55 165,000

    Page 37995

    Aviation (Ground)......................... 450 10 135,000 165,309 37 35 157,500

    Amateur Vanity Call Signs................. 11,500 10 230,230 247,964 2.16 2.16 248,400

    AM Class A \4a\........................... 67 1 286,000 276,418 4,126 4,125 276,375

    AM Class B \4b\........................... 1,483 1 3,435,250 3,439,404 2,319 2,325 3,447,975

    AM Class C \4c\........................... 882 1 1,201,500 1,227,453 1,392 1,400 1,234,800

    AM Class D \4d\........................... 1,522 1 3,862,500 4,071,166 2,675 2,675 4,071,350

    FM Classes A, B1 & C3 \4e\................ 3,107 1 8,379,375 8,528,907 2,745 2,750 8,544,250

    FM Classes B, C, C0, C1 & C2 \4f\......... 3,139 1 10,597,500 10,461,550 3,333 3,325 10,437,175

    AM Construction Permits................... 30 1 30,090 17,700 590 590 17,700

    FM Construction Permits \1\............... 185 1 142,500 138,750 750 750 138,750

    Satellite TV.............................. 127 1 190,625 197,208 1,553 1,550 196,850

    Satellite TV Construction Permit.......... 3 1 2,880 3,944 1,315 1,325 3,975

    Digital TV Markets 1-10................... 138 1 6,235,725 6,193,664 44,882 44,875 6,192,750

    Digital TV Markets 11-25.................. 138 1 5,636,875 5,838,689 42,309 42,300 5,837,400

    Digital TV Markets 26-50.................. 182 1 4,965,225 4,931,531 27,096 27,100 4,932,200

    Digital TV Markets 51-100................. 290 1 4,645,275 4,547,390 15,681 15,675 4,545,750

    Digital TV Remaining Markets.............. 380 1 1,769,975 1,814,316 4,775 4,775 1,814,500

    Digital TV Construction Permits1.......... 5 1 20,950 23,875 4,775 4,775 23,875

    Broadcast Auxiliaries..................... 25,800 1 254,000 315,533 12.23 10 258,000

    LPTV/Translators/Boosters/Class A TV...... 3,830 1 1,527,250 1,577,667 412 410 1,570,300

    CARS Stations............................. 325 1 165,750 197,262 607 605 196,625

    Cable TV Systems, including IPTV.......... 65,400,000 1 61,200,000 65,293,695 .9984 1.00 65,400,000

    Interstate Telecommunication Service $38,800,000,000 1 135,330,000 131,835,683 0.003398 0.00340 131,920,000

    Providers................................

    CMRS Mobile Services (Cellular/Public 330,000,000 1 58,680,000 60,312,520 0.1828 0.18 59,400,000

    Mobile)..................................

    CMRS Messag. Services..................... 2,900,000 1 240,000 232,000 0.0800 0.080 232,000

    BRS \2\................................... 900 1 469,200 646,718 719 720 648,000

    LMDS...................................... 190 1 86,700 136,529 719 720 136,800

    Per 64 kbps Int'l Bearer Circuits......... 4,484,000 1 1,032,277 1,073,199 .2393 .24 1,076,160

    Terrestrial (Common) & Satellite (Common &

    Non-Common)..............................

    Submarine Cable Providers (see chart in 39.19 1 8,530,139 7,554,010 192,766 192,775 7,554,370

    Appendix C) \3\..........................

    Earth Stations............................ 3,400 1 935,000 829,539 244 245 833,000

    Space Stations (Geostationary)............ 94 1 12,101,700 10,717,648 114,018 114,025 10,716,750

    Space Stations (Non-Geostationary......... 6 1 899,250 796,358 132,726 132,725 796,350

    ****** Total Estimated Revenue to be ................... ....... 339,965,741 341,541,247 .............. .............. 340,598,280

    Collected................................

    ****** Total Revenue Requirement.......... ................... ....... 339,844,000 339,844,000 .............. .............. 339,844,000

    Page 37996

    Difference................................ ................... ....... 121,741 1,697,247 .............. .............. 754,280

    --------------------------------------------------------------------------------------------------------------------------------------------------------

    \1\ The FM Construction Permit revenues and the VHF and UHF Construction Permit revenues were adjusted to set the regulatory fee to an amount no higher

    than the lowest licensed fee for that class of service. The reductions in the FM Construction Permit revenues are offset by increases in the revenue

    totals for FM radio stations. Similarly, reductions in the VHF and UHF Construction Permit revenues are offset by increases in the revenue totals for

    VHF and UHF television stations, respectively.

    \2\ MDS/MMDS category was renamed Broadband Radio Service (BRS). See Amendment of parts 1, 21, 73, 74 and 101 of the Commission's rules to Facilitate

    the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150-2162 and 2500-2690 MHz Bands, Report & Order

    and Further Notice of Proposed Rulemaking, 19 FCC Rcd 14165, 14169, paragraph 6 (2004).

    \3\ The chart at the end of Table B lists the submarine cable bearer circuit regulatory fees (common and non-common carrier basis) that resulted from

    the adoption of the Submarine Cable Order.

    \4\ The fee amounts listed in the column entitled ``Rounded New FY 2013 Regulatory Fee'' constitute a weighted average media regulatory fee by class of

    service. The actual FY 2014 regulatory fees for AM/FM radio station are listed on a grid located at the end of Table B.

    Table B--FY 2014 Schedule of Regulatory Fees

    Regulatory Fees for the First Eleven Categories Below Are Collected by

    the Commission in Advance To Cover the Term of the License and Are

    Submitted at the Time the Application Is Filed

    ------------------------------------------------------------------------

    Annual

    Fee category regulatory fee

    (U.S. $'s)

    ------------------------------------------------------------------------

    PLMRS (per license) (Exclusive Use) (47 CFR part 90).. 35.

    Microwave (per license) (47 CFR part 101)............. 15

    218-219 MHz (Formerly Interactive Video Data Service) 85

    (per license) (47 CFR part 95).......................

    Marine (Ship) (per station) (47 CFR part 80).......... 15

    Marine (Coast) (per license) (47 CFR part 80)......... 55

    General Mobile Radio Service (per license) (47 CFR 5

    part 95).............................................

    Rural Radio (47 CFR part 22) (previously listed under 10

    the Land Mobile category)............................

    PLMRS (Shared Use) (per license) (47 CFR part 90)..... 10

    Aviation (Aircraft) (per station) (47 CFR part 87).... 10

    Aviation (Ground) (per license) (47 CFR part 87)...... 35

    Amateur Vanity Call Signs (per call sign) (47 CFR part 2.16

    97)..................................................

    CMRS Mobile/Cellular Services (per unit) (47 CFR parts .18

    20, 22, 24, 27, 80 and 90)...........................

    CMRS Messaging Services (per unit) (47 CFR parts 20, .08

    22, 24 and 90).......................................

    Broadband Radio Service (formerly MMDS/MDS) (per 720

    license) (47 CFR part 27)............................ 720

    Local Multipoint Distribution Service (per call sign)

    (47 CFR, part 101)...................................

    AM Radio Construction Permits......................... 590

    FM Radio Construction Permits......................... 750

    Digital TV (47 CFR part 73) VHF and UHF Commercial: ................

    Markets 1-10...................................... 44,875

    Markets 11-25..................................... 42,300

    Markets 26-50..................................... 27,100

    Markets 51-100.................................... 15,675

    Remaining Markets................................. 4,775

    Construction Permits.............................. 4,775

    Satellite Television Stations (All Markets)........... 1,550

    Construction Permits--Satellite Television Stations... 1,325

    Low Power TV, Class A TV, TV/FM Translators & Boosters 410

    (47 CFR part 74).....................................

    Broadcast Auxiliaries (47 CFR part 74)................ 10

    CARS (47 CFR part 78)................................. 605

    Cable Television Systems (per subscriber) (47 CFR part 1.00

    76), Including IPTV..................................

    Interstate Telecommunication Service Providers (per .00340

    revenue dollar)......................................

    Earth Stations (47 CFR part 25)....................... 245

    Space Stations (per operational station in 114,025

    geostationary orbit) (47 CFR part 25) also includes

    DBS Service (per operational station) (47 CFR part

    100).................................................

    Space Stations (per operational system in non- 132,725

    geostationary orbit) (47 CFR part 25)................

    International Bearer Circuits--Terrestrial/Satellites .24

    (per 64KB circuit)...................................

    International Bearer Circuits--Submarine Cable........ See Table Below

    ------------------------------------------------------------------------

    FY 2014 Schedule of Regulatory Fees: Maintain Allocation (continued)

    Page 37997

    FY 2014 Radio Station Regulatory Fees

    ----------------------------------------------------------------------------------------------------------------

    FM FM

    AM Class AM Class AM Class AM Class Classes Classes

    Population Served A B C D A, B1 & B, C, C0,

    C3 C1 & C2

    ----------------------------------------------------------------------------------------------------------------

    3,000,000.................................... 9,300 7,800 5,700 6,750 10,500 12,025

    ----------------------------------------------------------------------------------------------------------------

    FY 2014 Schedule of Regulatory Fees

    International Bearer Circuits--Submarine Cable

    ------------------------------------------------------------------------

    Submarine cable systems

    (capacity as of December 31, Fee amount Address

    2013)

    ------------------------------------------------------------------------

    3,000,000.................................... 9,300 7,800 5,700 6,750 10,500 12,025

    ----------------------------------------------------------------------------------------------------------------

    FY 2013 Schedule of Regulatory Fees: Fee Rate Increases Capped at 7.5%

    International Bearer Circuits--Submarine Cable

    ------------------------------------------------------------------------

    Submarine cable systems

    (capacity as of December 31, Fee amount Address

    2012)

    ------------------------------------------------------------------------