Assessment and Collection of Regulatory Fees for Fiscal Year 2018

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 $322,035,000 that Congress has required the Commission to collect for fiscal year 2018, as amended, provides for the annual assessment and collection of regulatory fees under and respectively, for annual “Mandatory Adjustments” and “Permitted Amendments” to the Schedule of Regulatory Fees.

DATES:

Submit comments on or before June 21, 2018, and reply comments on or before July 6, 2018.

ADDRESSES:

You may submit comments, identified by MD Docket No. 18-175, by any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• Federal Communications Commission's website: 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. 15-121 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), FCC 18-65, MD Docket No. 18-175 adopted on May 21, 2018 and released on May 22, 2018. 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 website, 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.

I. Procedural Matters

A. Ex Parte Rules Permit-But-Disclose Proceeding

1. This Notice of Proposed Rulemaking (FY 2018 NPRM) 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 section 1.1206(b). In proceedings governed by section 1.49(f) or for which the Commission has made available a method of electronic filing, 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.

B. Comment Filing Procedures

2. Comments and Replies. Pursuant to sections 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.

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.

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 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.

C. Initial Regulatory Flexibility Analysis

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

D. Initial Paperwork Reduction Act of 1995 Analysis

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

II. Introduction

7. In this Notice of Proposed Rulemaking, we seek comment on the Commission's proposed regulatory fees for fiscal year (FY) 2018. We propose to collect $322,035,000 in regulatory fees for FY 2018, as detailed in the proposed fee schedules attached in Table 2.

III. Background

8. The Commission is required by Congress to assess regulatory fees each year in an amount that can reasonably be expected to equal the amount of its appropriation. Regulatory fees, mandated by Congress, are collected “to recover the costs of . . . enforcement activities, policy and rulemaking activities, user information services, and international activities.” Regulatory fees 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 . . . .” Regulatory fees recover direct costs, such as salary and expenses; indirect costs, such as overhead functions; and support costs, such as rent, utilities, and equipment. Regulatory fees also cover the costs incurred in regulating entities that are statutorily exempt from paying regulatory fees, entities whose regulatory fees are waived, and entities providing services for which we do not assess regulatory fees.

9. Congress sets the amount of regulatory fees the Commission must collect each year in the Commission's fiscal year appropriations. Section 9(a)(2) of the Communications Act of 1934, as amended (Communications Act or Act) requires the Commission to collect fees sufficient to offset the amount appropriated. To calculate regulatory fees, the Commission allocates the total collection target across all regulatory fee categories. The allocation of fees to fee categories is based on the Commission's calculation of Full Time Employees (FTEs) in each regulatory fee category. FTEs are classified as “direct” if the employee is in one of the four “core” bureaus; otherwise, that employee is considered an “indirect” FTE. The total FTEs for each fee category includes the direct FTEs associated with that category, plus a proportional allocation of indirect FTEs. The Commission then allocates the total amount to be collected among the various regulatory fee categories within each of the core bureaus. Each regulatee within a fee category pays its proportionate share based on an objective measure (e.g., revenues or number of subscribers). These calculations are illustrated in Table 1. The sources for the unit estimates that are used in these calculations are listed in Table 3.

10. The Commission annually reviews the regulatory fee schedule, proposes changes to the schedule to reflect changes in the amount of its appropriation, and proposes increases or decreases to the schedule of regulatory fees. The Commission will make changes to the regulatory fee schedule “if the Commission determines that the schedule requires amendment to comply with the requirements” of section 9(b)(1)(A) of the Act. The Commission may also add, delete, or reclassify services in the fee schedule to reflect additions, deletions, or changes in the nature of its services “as a consequence of Commission rulemaking proceedings or changes in law.”

11. As part of its annual review, the Commission regularly seeks to improve its regulatory fee analysis. For example, in the FY 2014 Report and Order, the Commission adopted a new regulatory fee subcategory for toll free numbers within the Interstate Telecommunications Service Provider (ITSP) category and increased the de minimis threshold from $10 to $500 for annual regulatory fee payors. In the FY 2015 Report and Order, the Commission adopted a regulatory fee for DBS, as a subcategory of the cable television and IPTV fee category, and for toll-free numbers, and reallocated four International Bureau FTEs from direct to indirect. In the FY 2016 Report and Order, the Commission adjusted regulatory fees for radio and television broadcasters, based on the type and class of service and on the population served. In the FY 2017 Report and Order, the Commission reallocated as indirect 38 FTEs in the Wireline Competition Bureau assigned to work on non-high cost programs of the Universal Service Fund. The Commission also reallocated for regulatory fee purposes, four FTEs assigned to work on numbering issues from the Wireline Competition Bureau to the Wireless Telecommunications Bureau; included non-common carrier terrestrial international bearer circuits (IBCs) in the regulatory fee methodology; and increased the de minimis threshold to $1,000 for annual regulatory fee payors. In this proceeding, the Commission again seeks to improve its regulatory fee analysis.

12. In this Notice of Proposed Rulemaking, we seek comment on regulatory fees for FY 2018, including an incremental increase in the DBS fee rate. We also seek comment on a new methodology for broadcast television regulatory fees for FY 2019, and a tiered rate structure for international bearer circuit fees. The Commission previously sought comment on a proposal for tiers in the Further Notice of Proposed Rulemaking attached to the FY 2017 Report and Order, and we seek additional comment on this issue below.

IV. Notice of Proposed Rulemaking

A. Discussion—FY 2018 Regulatory Fees

13. In this FY 2018 NPRM, we seek comment on a regulatory fee schedule for FY 2018, pursuant to section 9 of the Communications Act, in order to collect $322,035,000 in regulatory fees. These regulatory fees are mandated by Congress and are collected “to recover the costs of . . . enforcement activities, policy and rulemaking activities, user information services, and international activities.” Of this amount, we project approximately $20.13 million (6.25 percent of the total FTE allocation) in fees from International Bureau regulatees; $84.70 million (26.3 percent of the total FTE allocation) in fees from Wireless Telecommunications Bureau regulatees; $103.99 million (32.29 percent of the total FTE allocation) from Wireline Competition Bureau regulatees; and $113.22 million (35.16 percent of the total FTE allocation) from Media Bureau regulatees. These regulatory fees are due in September 2018. We seek comment on the schedule of regulatory fees for FY 2018 in Table 2. For comparison purposes, the FY 2017 regulatory fee rates are listed in Table 5. We discuss and seek comment on several specific issues below.

1. Direct Broadcast Satellite (DBS) Regulatory Fees

14. DBS service is a nationally distributed subscription service that delivers video and audio programming via satellite to a small parabolic dish antenna at the subscriber's location. The two DBS providers, AT&T and DISH Network, are multichannel video programming distributors (MVPDs). The proposed fee schedule in Table 2 includes an updated regulatory fee for DBS, a subcategory in the cable television and IPTV category.

15. In 2015, the Commission adopted an initial regulatory fee for DBS, as a subcategory in the cable television and IPTV category, of 12 cents per year per subscriber, or one cent per month. This regulatory fee subcategory was based on Media Bureau FTE activity involving regulation and oversight of all MVPDs, which included DBS providers. The Commission concluded there was no reasonable basis to continue to exclude DBS providers from sharing in the cost of MVPD oversight and regulation with cable television and IPTV. The Commission also committed to updating the regulatory fee rate as necessary to ensure an appropriate level of regulatory fees due to the Media Bureau resources dedicated to regulation and oversight of MVPDs, including DBS. Such examination reflected a GAO report, which recommended that the Commission “regularly update analyses to ensure that fees are set based on relevant information.” In lieu of directly including DBS providers in the cable television/IPTV category, the Commission initially phased in the Media Bureau-based regulatory fee for DBS, starting at 12 cents per subscriber per year. Since then, the Commission has incrementally increased the DBS regulatory fee, bringing it closer to the per-subscriber rate paid by cable television and IPTV.

16. Based on our analysis of the cable television/IPTV category, we seek comment on whether Media Bureau resources devoted to MVPD proceedings, including DBS, support further revising the DBS regulatory fee rate to continue to bring the DBS rate closer to the cable television/IPTV rate, which, for FY 2018, is proposed to be 77 cents per subscriber per year. Specifically, how many FTEs does the Media Bureau devote to DBS as compared to cable? How many FTEs does the Media Bureau devote to DBS as compared to IPTV? Are the regulations imposed on both cable and DBS similar, or does one distributor face a higher regulatory burden? Are the regulations imposed on both IPTV and DBS similar, or does one distributor face a higher regulatory burden? How do such regulations translate to FTEs? In addition to FTEs, the Act requires us to take into account “factors that are reasonably related to the benefits provided to the payor of the fee by the Commission's activities” Do DBS operators benefit more or less from Commission-issued licenses than cable operators and IPTV providers? How does the Commission's long-standing commitment to competitive neutrality impact our rate calculations? Additionally, we have previously incrementally increased the DBS regulatory fee to avoid potential consumer rate shock. Does that concern remain valid?

17. We seek comment on a DBS regulatory fee rate of 48 cents per subscriber per year, as set forth in the proposed fee schedule in Table 2. We invite comment on whether the proposed rate is appropriate. Ultimately, this will be an increase of ten cents from the FY 2017 DBS rate. Is such an increase justified based on Commission resources allocated to DBS, and the related benefits provided to DBS providers by the Commission's activities? Or is such an increase inappropriate because there is a reasonable basis to differentiate between DBS providers and cable television and IPTV?

2. Broadcast Television Licenses, Post-Incentive Auction

18. On March 29, 2016, the Commission commenced the incentive auction to allow broadcast television stations to make their spectrum available for wireless broadband licensees. On April 13, 2017, the Commission released a Public Notice formally closing the auction, and beginning the 39-month post-auction transition period during which some broadcast television stations will transition to new channel assignments and other stations will go off the air. Licensees who held a broadcast television station license on October 1, 2017 are reminded that they are responsible for regulatory fees for that license. Licensees who have relinquished their licenses by September 30, 2017 are not responsible for regulatory fees for the cancelled license.

3. Terrestrial and Satellite International Bearer Circuits

19. In 2009, the Commission adopted a new methodology for calculating submarine cable international bearer circuits regulatory fees by eliminating the distinction between common carriers and non-common carriers and assessing a flat per cable landing license fee for all submarine cable systems, with higher fees for larger submarine cable systems and lower fees for smaller systems. In the Submarine Cable Order, the Commission adopted a tiered system using gigabits per second (Gbps) increments (instead of 64 kbps). The Commission did not revise the terrestrial and satellite IBC regulatory fee methodology then because of the “complexity of the legal, policy and equity issues involved.”

20. In the FY 2017 NPRM, however, the Commission sought comment on a proposal to adopt a tiered regulatory fee rate structure for all terrestrial and satellite IBCs, similar to the submarine cable tiered regulatory fee methodology, based on capacity and including both common carrier and non-common carrier IBCs. In the FY 2017 Report and Order, the Commission concluded that a methodology for terrestrial and satellite IBC regulatory fees based on active circuits should be consistent with the submarine cable methodology and include common carrier and non-common carrier terrestrial IBCs. In our Further Notice of Proposed Rulemaking, we sought comment on a tiered methodology for terrestrial and satellite IBCs. We proposed adopting, for terrestrial and satellite IBCs, the five tiers adopted for submarine cable systems.

21. CenturyLink contends that we should adopt the two-tier methodology proposed earlier by Level 3. CenturyLink argues that a two-tier system is sufficient to ensure that the satellite and terrestrial IBC regulatory fees do not serve as a barrier to entry for smaller providers while ensuring that the larger providers pay a fair and equitable portion of regulatory fees. According to CenturyLink, a two-tier system would reduce the incentive to underreport and would be less burdensome because a carrier would be able to easily determine which tier it falls into, without having to count each of its circuits annually. AT&T supports a multi-tiered rate structure and contends that, due to the wide disparity in satellite and terrestrial providers' IBC circuit volumes, a two-tiered fee structure would likely result in fee increases for smaller carriers.

22. SIA opposes a tiered approach for satellite IBC regulatory fees and contends that a tiered rate structure would result in “massive overcharges” and is “arbitrary and capricious.” We recognize SIA's concerns that a tiered rate structure such as that proposed by Level 3 could result in higher fees if carriers with fewer active circuits are grouped with carriers with a much larger quantity of active circuits. The multi-tier rate structure would take that concern into consideration and be designed to ensure that providers' fees are assessed at an appropriate level, based on the number of active circuits. A multi-tier rate structure would be based on the number of active circuits, but grouped into levels or tiers. This would be more equitable than a two-tiered system because it better takes into account the quantity of active circuits of each regulatee when determining a fee payment. This fee structure would be less burdensome to calculate because the service providers would not have to count each active circuit on December 31 of each year (as long as they know which tier they are in), yet this fee structure is also “reasonably related to the benefits provided to the payer of the fee by the Commission's activities . . . .” As the Commission observed when adopting a five-tier fee structure for submarine cable, the tiered methodology will be competitively neutral, easier for the Commission to administer, and promote better compliance by providers.

23. We do not, however, have sufficient information at this time to establish an appropriate tier structure for terrestrial and satellite IBCs. In the FY 2017 Report and Order, we determined that IBCs should be assessed regulatory fees for non-common carrier as well as common carrier terrestrial circuits. We do not yet have information on the number of non-common carrier terrestrial circuits for which fees will be paid. The number of non-common carrier terrestrial circuits will affect the rate and the rate structure of the tiers for this category. Consequently, for FY 2018, we will continue to assess the fee on a per-circuit basis, although we propose to use Gbps as the measurement rather than 64 kbps. In Table 2, we list the proposed per-circuit rate for IBCs for FY 2018. With the information we will obtain from payors in September 2018, we should have sufficient information to be able to propose a tiered rate structure for FY 2019, and we seek comment on any other issues that commenters believe we should consider when making such a proposal.

B. Methodology for FY 2019 Regulatory Fee Calculations

1. Broadcast Television Stations

24. Full service television station licensees are subject to regulatory fee payments based on the market served. Broadcast full service television stations pay regulatory fees based on the schedule of regulatory fees established in section 9(g) of the Communications Act, which consolidated stations into market groupings 1-10, 11-25, 26-50, 51-100, and remaining markets. The Commission subsequently established a separate fee category for satellite television stations. The Commission uses Nielsen Designated Market Areas (DMAs) to define the market a station serves. For FY 2017, the regulatory fees for full service stations ranged from $1,725, for satellite stations, to $59,750, for stations in markets 1-10.

25. We seek comment on whether we can more accurately ascertain the actual market served by a station for purposes of assessing regulatory fees by examining the actual population covered by the station's contours rather than using DMAs. If adopted, this proposal would constitutes a permitted amendment as defined in section 9(b)(3) of the Act, and pursuant to section 9(b)(4)(B), it must be submitted to Congress at least 90 days before it would become effective. As such, we seek comment on whether, for FY 2019, regulatory fees should be assessed for full-power broadcast television stations based on the population covered by the station's contour, instead of DMAs. Such an approach is consistent with the methodology used for AM and FM broadcasters, in which fees are based on population served and the class of service based on the signal contours defined in Table 4. In addition, this proposal would address concerns about the assessment of regulatory fees for broadcast television satellite stations. We seek comment on whether this proposal would “take into account factors that are reasonably related to the benefits provided to the payer of the fee by the Commission's activities . . . .” Commenters should also discuss whether this new methodology would more accurately reflect a station's actual market. We believe that this population-based approach would allow us to take into account the lower population served by stations located in the fringes of a DMA. We seek comment on this view. Alternatively, do DMAs, which account for MVPD carriage, better reflect a television station's reach, or is there some other method by which we should calculate broadcast television regulatory fees? Commenters should also discuss whether, if we adopt this approach, we should phase in the implementation of this methodology over a two-year, or longer, period of time. For example, we could limit an increase or decrease in regulatory fees for the first year of implementation.

26. If adopted, this proposal would enable broadcasters to review population data for their service area. The data would be extracted from the TVStudy database, based on a station's projected noise-limited service contour, consistent with our rules. An example from existing data is attached as Table 6. https://www.fcc.gov/media/television/video-division We would multiply the population by a factor for which we would seek comment, e.g., 0.63 cents ($.0063). We would, in our annual Notice of Proposed Rulemaking, refer broadcasters to the population data and the factor proposed so that they could determine how their regulatory fees would be calculated.

27. Alternatively, we seek comment on whether, under the proposed methodology, we should calculate regulatory fees based on the specific population covered by the contour for each station, or whether we should group broadcast stations into tiers, based on the population, with the same regulatory fee for each station within a group or tier. Commenters supporting a tiered approach should discuss how many tiers would be reasonable. For example, would the tiers currently used for AM and FM broadcasters (<25,000, 25,001-75,000, 75,001-150,000, 150,001-500,000, 500,001-1,200,000, 1,200,001-3,000,000, 3,000,001-6,000,00, >6,000,000) be reasonable?

28. We tentatively conclude that revising our methodology for assessing regulatory fees for broadcast television stations would be a permitted amendment as defined in section 9(b)(3) of the Act, and pursuant to section 9(b)(4)(B), it must be submitted to Congress at least 90 days before it would become effective. Therefore, for FY 2018, we will assess regulatory fees for all broadcast television stations using the same methodology as we did for FY 2017. The proposed regulatory fees for broadcast television stations for FY 2018 are in Table 2.

2. Small Satellites

29. The Commission recently proposed revisions to our rules to facilitate commercial deployment of a class of satellites known colloquially as “small satellites.” Small satellites typically have a number of characteristics that distinguish them from traditional non-geostationary satellite orbit (NGSO) satellite systems, such as having a lower mass, shorter duration mission, and more limited spectrum needs. The proposed rules are designed to lower the regulatory burden involved in licensing small satellites and reduce application processing times. Because we expect that small satellite applications will take less time and fewer Commission resources to process than traditional satellite systems, the Commission, in the Small Satellite NPRM, proposed to establish a new fee for small satellite applications of $30,000—well below the application fee of $454,705 for Low-Earth Orbit Satellite Systems. Consistent with development of a new application fee for small satellites, we seek comment on whether, for FY 2019, we should adopt a new regulatory fee category for small satellites. Entities authorized to operate NGSO systems under Part 25 of our rules currently must pay an annual regulatory fee which, for FY 2017, was $135,350 per operational system. We seek comment on whether the regulatory fee for small satellites should be 1/20th of the regulatory fee currently applicable to NGSO systems, consistent with the ratio of the application fee proposed for small satellites to the application fee currently applicable to NGSO systems. In discussing the appropriate regulatory fee for small satellites, commenters should take into consideration that this is a new industry sector typically involving relatively low-cost systems, as compared with traditional satellite systems, and a high regulatory fee could limit the commercial applications of small satellites.

30. We tentatively conclude that adopting a new regulatory fee category for small satellites would be a permitted amendment as defined in section 9(b)(3) of the Act, and pursuant to section 9(b)(4)(B), it must be submitted to Congress at least 90 days before it would become effective.

V. Procedural Matters

A. Payment of Regulatory Fees

1. Checks Will Not Be Accepted for Payment of Annual Regulatory Fees

31. Pursuant to an Office of Management and Budget (OMB) directive, the Commission is moving towards a paperless environment, extending to disbursement and collection of select federal government payments and receipts. In 2015, the Commission stopped accepting checks (including cashier's checks and money orders) and the accompanying hardcopy forms (e.g., Forms 159, 159-B, 159-E, 159-W) for the payment of regulatory fees. All regulatory fee payments must be made by online Automated Clearing House (ACH) payment, online credit card, or wire transfer. Any other form of payment (e.g., checks, cashier's checks, or money orders) will be rejected. For payments by wire, a Form 159-E should still be transmitted via fax so that the Commission can associate the wire payment with the correct regulatory fee information.

2. Credit Card Transaction Levels

32. Since June 1, 2015, in accordance with U.S. Treasury Announcement No. A-2014-04 (July 2014), the amount that can be charged on a credit card for transactions with federal agencies has is $24,999.99. Transactions greater than $24,999.99 will be rejected. This limit applies to single payments or bundled payments of more than one bill. Multiple transactions to a single agency in one day may be aggregated and treated as a single transaction subject to the $24,999.99 limit. Customers who wish to pay an amount greater than $24,999.99 should consider available electronic alternatives such as Visa or MasterCard debit cards, ACH debits from a bank account, and wire transfers. Each of these payment options is available after filing regulatory fee information in Fee Filer. Further details will be provided regarding payment methods and procedures at the time of FY 2018 regulatory fee collection in Fact Sheets, available at https://www.fcc.gov/regfees.

3. Payment Methods

33. During the fee season for collecting FY 2018 regulatory fees, regulatees can pay their fees by credit card through Pay.gov, ACH, debit card, or by wire transfer. Additional payment instructions are posted on the Commission's website at http://transition.fcc.gov/fees/regfees.html. The receiving bank for all wire payments is the U.S. Treasury, New York, New York. When making a wire transfer, regulatees must fax a copy of their Fee Filer generated Form 159-E to the Federal Communications Commission at (202) 418-2843 at least one hour before initiating the wire transfer (but on the same business day) so as not to delay crediting their account. Regulatees should discuss arrangements (including bank closing schedules) with their bankers several days before they plan to make the wire transfer to allow sufficient time for the transfer to be initiated and completed before the deadline. Complete instructions for making wire payments are posted at http://transition.fcc.gov/fees/wiretran.html.

4. De Minimis Regulatory Fees

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

5. Standard Fee Calculations and Payment Dates

35. 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, 2017 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, 2017.
• Wireline (Common Carrier) Services: Regulatory fees must be paid for authorizations that were granted on or before October 1, 2017. In instances where a permit or license is transferred or assigned after October 1, 2017, 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. For Responsible Organizations (RespOrgs) that manage Toll Free Numbers (TFN), regulatory fees should be paid on all working, assigned, and reserved toll free numbers as well as toll free numbers in any other status as defined in section 52.103 of the Commission's rules. The unit count should be based on toll free numbers managed by RespOrgs on or about December 31, 2017.

• 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, 2017. The number of subscribers, units, or telephone numbers on December 31, 2017 will be used as the basis from which to calculate the fee payment. In instances where a permit or license is transferred or assigned after October 1, 2017, responsibility for payment rests with the holder of the permit or license as of the fee due date.
• Wireless Services, Multi-year fees: The first eight regulatory fee categories in our Schedule of Regulatory Fees pay “small multi-year wireless regulatory fees.” Entities pay these regulatory fees in advance for the entire amount period covered by the five-year or ten-year terms of their initial licenses, and pay regulatory fees again only when the license is renewed or a new license is obtained. We include these fee categories in our rulemaking to publicize our estimates of the number of “small multi-year wireless” licenses that will be renewed or newly obtained in FY 2018.
• Multichannel Video Programming Distributor Services (cable television operators, CARS licensees, DBS, and IPTV): Regulatory fees must be paid for the number of basic cable television subscribers as of December 31, 2017. Regulatory fees also must be paid for CARS licenses that were granted on or before October 1, 2017. In instances where a permit or license is transferred or assigned after October 1, 2017, responsibility for payment rests with the holder of the permit or license as of the fee due date. For providers of Direct Broadcast Satellite (DBS) service and IPTV-based MVPDs, regulatory fees should be paid based on a subscriber count on or about December 31, 2017. In instances where a permit or license is transferred or assigned after October 1, 2017, responsibility for payment rests with the holder of the permit or license as of the fee due date.

• International Services: Regulatory fees must be paid for (1) earth stations and (2) geostationary orbit space stations and non-geostationary orbit satellite systems that were licensed and operational on or before October 1, 2017. In instances where a permit or license is transferred or assigned after October 1, 2017, 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, 2017. In instances where a license is transferred or assigned after October 1, 2017, responsibility for payment rests with the holder of the license as of the fee due date. For regulatory fee purposes, the allocation in FY 2018 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 Terrestrial and Satellite IBCs are to be paid based on active (used or leased) international bearer circuits as of December 31, 2017 in any terrestrial or satellite transmission facility for the provision of service to an end user or resale carrier. When calculating the number of such active circuits, entities must include circuits used by themselves or their affiliates. For these purposes, “active circuits” include backup and redundant circuits as of December 31, 2017. 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, 2017, 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 2018 will remain at 87.6 percent for submarine cable and 12.4 percent for satellite/terrestrial facilities.

B. Commercial Mobile Radio Service (CMRS) and Mobile Services Assessments

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

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

38. Because some carriers do not file the NRUF report, they may not see their telephone number counts in Fee Filer. In these instances, the carriers should compute their fee payment using the standard methodology that is currently in place for CMRS Wireless services (i.e., compute their telephone number counts as of December 31, 2017), and submit their fee payment accordingly. Whether a carrier reviews its telephone number counts in Fee Filer or not, the Commission reserves the right to audit the number of telephone numbers for which regulatory fees are paid. In the event that the Commission determines that the number of telephone numbers that are paid is inaccurate, the Commission will bill the carrier for the difference between what was paid and what should have been paid.

C. Enforcement

39. To be considered timely, regulatory fee payments must be made electronically by the payment due date for 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 for filing these fees. Failure to pay regulatory fees and/or any late penalty will subject regulatees to sanctions, including those set forth in section 1.1910 of the Commission's rules, which generally requires the Commission to withhold action on “applications, including on a petition for reconsideration or any application for review of a fee determination, or requests for authorization by any entity found to be delinquent in its debt to the Commission” and in the DCIA. We also assess administrative processing charges on delinquent debts to recover additional costs incurred in processing and handling the debt pursuant to the DCIA and section 1.1940(d) of the Commission's rules. These administrative processing charges will be assessed on any delinquent regulatory fee, in addition to the 25 percent late charge penalty. In the 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.

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

41. Pursuant to the “red light rule,” we will withhold action on any applications 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. Failure to pay regulatory fees can 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).

VI. Additional Tables

Regulatory fees for the categories shaded in gray are collected by the Commission in advance to cover the term of the license and are submitted at the time the application is filed.

Regulatory fees for the categories shaded in gray are collected by the Commission in advance to cover the term of the license and are submitted at the time the application is filed.

In order to calculate individual service fees for FY 2018, we adjusted FY 2017 payment units for each service to more accurately reflect expected FY 2018 payment liabilities. We obtained our updated estimates through a variety of means. For example, we used Commission licensee data bases, actual prior year payment records and industry and trade association projections when available. The databases we consulted include our Universal Licensing System (ULS), International Bureau Filing System (IBFS), Consolidated Database System (CDBS) and Cable Operations and Licensing System (COALS), as well as reports generated within the Commission such as the Wireless Telecommunications Bureau's Numbering Resource Utilization Forecast.

We sought verification for these estimates from multiple sources and, in all cases, we compared FY 2018 estimates with actual FY 2017 payment units to ensure that our revised estimates were reasonable. Where appropriate, we adjusted and/or rounded our final estimates to take into consideration the fact that certain variables that impact on the number of payment units cannot yet be estimated with sufficient accuracy. These include an unknown number of waivers and/or exemptions that may occur in FY 2018 and the fact that, in many services, the number of actual licensees or station operators fluctuates from time to time due to economic, technical, or other reasons. When we note, for example, that our estimated FY 2018 payment units are based on FY 2017 actual payment units, it does not necessarily mean that our FY 2018 projection is exactly the same number as in FY 2017. We have either rounded the FY 2018 number or adjusted it slightly to account for these variables.

Table 4

Factors, Measurements, and Calculations That Determine Station Signal Contours and Associated Population Coverages

AM Stations

For stations with nondirectional daytime antennas, the theoretical radiation was used at all azimuths. For stations with directional daytime antennas, specific information on each day tower, including field ratio, phase, spacing, and orientation was retrieved, as well as the theoretical pattern root-mean-square of the radiation in all directions in the horizontal plane (RMS) figure (milliVolt per meter (mV/m) @1 km) for the antenna system. The standard, or augmented standard if pertinent, horizontal plane radiation pattern was calculated using techniques and methods specified in sections 73.150 and 73.152 of the Commission's rules. Radiation values were calculated for each of 360 radials around the transmitter site. Next, estimated soil conductivity data was retrieved from a database representing the information in FCC Figure R3. Using the calculated horizontal radiation values, and the retrieved soil conductivity data, the distance to the principal community (5 mV/m) contour was predicted for each of the 360 radials. The resulting distance to principal community contours were used to form a geographical polygon. Population counting was accomplished by determining which 2010 block centroids were contained in the polygon. (A block centroid is the center point of a small area containing population as computed by the U.S. Census Bureau.) The sum of the population figures for all enclosed blocks represents the total population for the predicted principal community coverage area.

FM Stations

The greater of the horizontal or vertical effective radiated power (ERP) (kW) and respective height above average terrain (HAAT) (m) combination was used. Where the antenna height above mean sea level (HAMSL) was available, it was used in lieu of the average HAAT figure to calculate specific HAAT figures for each of 360 radials under study. Any available directional pattern information was applied as well, to produce a radial-specific ERP figure. The HAAT and ERP figures were used in conjunction with the Field Strength (50-50) propagation curves specified in 47 CFR 73.313 of the Commission's rules to predict the distance to the principal community (70 dBu (decibel above 1 microVolt per meter) or 3.17 mV/m) contour for each of the 360 radials. The resulting distance to principal community contours were used to form a geographical polygon. Population counting was accomplished by determining which 2010 block centroids were contained in the polygon. The sum of the population figures for all enclosed blocks represents the total population for the predicted principal community coverage area.

Regulatory fees for the categories shaded in gray are collected by the Commission in advance to cover the term of the license and are submitted at the time the application is filed.