AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

In this document, the Commission revises its Schedule of Regulatory Fees to recover an amount of $339,000,000 that Congress has required the Commission to collect for fiscal year 2020. Section 9 of the Communications Act of 1934, as amended, provides for the annual assessment and collection of regulatory fees under sections 9(b)(2) and 9(b)(3), respectively.

DATES:

Effective September 23, 2020. To avoid penalties and interest, regulatory fees should be paid by the due date of September 25, 2020.

FOR FURTHER INFORMATION CONTACT:

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

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Report and Order, FCC 20-120, MD Docket No. 20-105, adopted and released on August 31, 2020. The full text of this document is available for public inspection by downloading the text from the Commission's website at http://transition.fcc.gov/​Daily_​Releases/​Daily_​Business/​2017/​db0906/​FCC-17-111A1.pdf.

I. Administrative Matters

A. Final Regulatory Flexibility Analysis

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

B. Final Paperwork Reduction Act of 1995 Analysis

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

C. Congressional Review Act

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

3. In this Report and Order, we adopt a schedule to collect the $339,000,000 in congressionally required regulatory fees for fiscal year (FY) 2020. The regulatory fees for all payors are due in September 2020. In future rulemaking, we will seek comment on regulatory fee subcategories for FY 2021, for nongeostationary orbit (NGSO) satellites, as proposed by several commenters.

4. Earlier this year, in the 2020 Regulatory Fee Reform Order (85 FR 37364 (June 22, 2020)), we adopted several reforms regarding non-U.S. licensed space stations with U.S. market access grants, the apportionment of full time equivalents (FTEs) within the International Bureau for international bearer circuits and satellite issues, the apportionment of FTEs within the Satellite Division of the International Bureau for geostationary orbit (GSO) and NGSO space station regulatory fee, and we adopted a limitation on population counts for certain very high frequency (VHF) television broadcast stations. In the accompanying FY 2020 Notice of Proposed Rulemaking (NPRM) (85 FR 32256 (May 28, 2020)), we sought comment on a proposed fee schedule and also on certain issues for International Bureau and Media Bureau regulatees. Specifically, we sought comment on a schedule of proposed regulatory fees as well as certain issues: Adjusting the allocation of international bearer circuit (IBC) fees between submarine cable and terrestrial and satellite IBCs from 87.6%-12.4% to 95%-5%; combining the submarine cable regulatory fee tiers with new tiers for terrestrial and satellite IBCs in a unified tier structure; basing full-power broadcast television fees on the population covered by the station's contour; and continuing to increase the direct broadcast satellite (DBS) regulatory fees by 12 cents, to 72 cents, per subscriber, per year. In addition, we sought comment on economic effects due to the COVID-19 pandemic on regulatory fee payors.

II. Report and Order

A. Allocating FTEs

5. In the FY 2020 NPRM, the Commission proposed that non-auctions funded FTEs will be classified as direct only if in one of the four core bureaus, i.e., in the Wireline Competition Bureau, the Wireless Telecommunications Bureau, the Media Bureau, or the International Bureau. The indirect FTEs are from the following bureaus and offices: Enforcement Bureau, Consumer and Governmental Affairs Bureau, Public Safety and Homeland Security Bureau, Chairman and Commissioners' offices, Office of the Managing Director, Office of General Counsel, Office of the Inspector General, Office of Communications Business Opportunities, Office of Engineering and Technology, Office of Legislative Affairs, Office of Workplace Diversity, Office of Media Relations, Office of Economics and Analytics, and Office of Administrative Law Judges, along with some employees in the Wireline Competition Bureau and the International Bureau that the Commission previously classified as indirect.

6. We will continue to apportion regulatory fees across fee categories based on the number of direct FTEs in each core bureau and the proportionate number of indirect FTEs and to take into account factors that are reasonably related to the payor's benefits. In sum, there were 311 direct FTEs for FY 2020, distributed among the core bureaus as follows: International Bureau (28), Wireless Telecommunications Bureau (73), Wireline Competition Bureau (94), and the Media Bureau (116). This results in 9.00% of the FTE allocation for International Bureau regulatees; 23.47% of the FTE allocation for Wireless Telecommunications Bureau regulatees; 30.23% of the FTE allocation for Wireline Competition Bureau regulatees; and 37.30% of FTE allocation for Media Bureau regulatees. There are 911 indirect FTEs that are allocated proportionally to the 311 direct FTEs: Enforcement Bureau (181), Consumer and Governmental Affairs Bureau (113), Public Safety and Homeland Security Bureau (89), part of the International Bureau (56), part of the Wireline Competition Bureau (38), Chairman and Commissioners' offices (23), Office of the Managing Director (132), Office of General Counsel (70), Office of the Inspector General (45), Office of Communications Business Opportunities (8), Office of Engineering and Technology (72), Office of Legislative Affairs (8), Office of Workforce Diversity (6), Office of Media Relations (14), Office of Economics and Analytics (53), and Office of Administrative Law Judges (3). Allocating these indirect FTEs based on the direct FTE allocations yields an additional 82.0 FTEs attributable to International Bureau regulatees, 213.8 FTEs attributable to Wireless Telecommunications Bureau regulatees, 275.4 FTEs attributable to Wireline Competition Bureau regulatees, and 339.8 FTEs attributable to Media Bureau regulatees.

7. As in prior years, broadcasters have taken issue with the Commission's practice of allocating costs associated with indirect FTEs in proportion to each core bureau's direct FTEs. Broadcasters suggest that the methodology should instead consider whether the functions of specific indirect FTEs benefit specific regulatory fee payors. We affirm the findings in our FY 2019 regulatory fee proceeding, where we explained in detail our existing methodology for assessing fees, noted the changes in the statute, and sought comment on what changes to our regulatory fee methodology, if any, were necessary to implement the RAY BAUM'S Act amendments to our regulatory fee authority. After review of the comments received, we determined in the FY 2019 Report and Order (84 FR 50890 (Sept. 26, 2019)) that because the new section 9 closely aligned to how the Commission assessed and collected fees under the prior section 9, we would hew closely to the existing methodology, expressly rejecting any suggestion that the Commission should abandon the step in our process whereby we designate FTEs as either direct or indirect and allocate indirect FTEs in proportion to the direct FTEs in each of the core bureaus. The National Association of Broadcasters (NAB) also asserts after evaluating the FTE allocations within the bureaus and offices, the Commission failed to also consider other factors that reasonably related to the benefits provided to the payors, particularly the radio industry. But as noted above, it has been the Commission's longstanding methodology to use direct FTEs as a measure of the benefits provided, and the Commission engages in a fresh review of the FTE allocations each year as part of its annual proceeding.

B. Direct Broadcast Satellite Regulatory Fees

8. Direct broadcast satellite 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). In 2015, the Commission adopted an initial regulatory fee for DBS, as a subcategory in the cable television and internet protocol (IPTV) category. The Commission then phased in the new Media Bureau-based regulatory fee for DBS, starting at 12 cents per subscriber per year. For FY 2020, the Commission proposed to increase the fee to 72 cents per subscriber, per year.

9. AT&T and DISH—the two DBS operators in the United States—claim that the proposed fee increase of 12 cents is not “because the nation's two DBS providers have caused the Commission to incur significant full-time equivalent (`FTE') employee costs commensurate with this calculation, but rather because the Commission apparently desires regulatory fee parity between cable operators and DBS providers.” We reject AT&T's and DISH's claim that we should not adopt a fee increase and that such an increase would result in shifting cable-caused costs to DBS providers. The Media Bureau relies on a common pool of FTEs to carry out its oversight of MVPDs and other video distribution providers. A significant number of Media Bureau FTEs work on MVPD issues such as market modifications, must-carry and retransmission consent disputes, program carriage complaints, media modernization efforts, and proposed transactions, that affect all MVPDs. A significant number of Media Bureau FTEs work on MVPD issues such as market modifications, must-carry and retransmission consent disputes, program carriage complaints, media modernization efforts, and proposed transactions, that affect all MVPDs. Therefore, we adopt the proposal in the FY 2020 NPRM to continue to phase in the DBS regulatory fee by 12 cents, to 72 cents per subscriber, per year. This increase will result in a regulatory fee of 89 cents per subscriber, per year, for cable television/IPTV, and bring DBS closer to parity with cable television/IPTV.

10. Finally, the DBS providers contend that the Commission should use an MVPD subscriber snapshot closer in time to the regulatory fee order release date due to declining subscriber counts. The use of a more recent customer data, such as in June or July, would preclude the Commission from retrieving, reviewing, and using the information while drafting the Notice of Proposed Rulemaking and seeking comment on proposed fees, a critical step in the annual regulatory fee process. Accordingly, we decline to adjust the date of the MVPD subscriber count snapshot.

C. Television Broadcaster Regulatory Fees

11. Historically, regulatory fees for full-power television stations were based on the Nielsen Designated Market Area (DMA) groupings 1-10, 11-25, 26-50, 51-100, and remaining markets (DMAs 101-210. In the FY 2018 Report and Order (83 FR 47079 (Sept. 18, 2018)), we adopted a new methodology that would transition from a blended fee based methodology to one that is based entirely on population. Accordingly, we now adopt FY 2020 fees for full-power broadcast television stations based on the population covered by a full-power broadcast television station's contour. Table 9 lists this population data for each licensee and the population-based fee (population multiplied by $.007837) for each full-power broadcast television station, including each satellite station.

12. In the FY 2020 NPRM, we also proposed to adjust the fees of Puerto Rico broadcasters in two discrete ways. First, we proposed to account for the objectively measurable reduction in population by reducing the population counts used in TVStudy by 16.9%, which reflects the decline between the last census in 2010 and the current population estimate. Second, we proposed to limit the market served by a primary television stations and commonly owned satellite broadcast stations in Puerto Rico to no more than 3.10 million people, the latest population estimate. Under this scenario, the fee for television broadcasters and commonly owned satellites, using the proposed population fee of $.007837, would not exceed $24,300. Accordingly, we adopt these adjustments and the proposed regulatory fees for these television broadcasters.

13. We disagree with arguments attempting to relitigate our treatment of VHF stations. Several commenters contend that ultra high frequency (UHF) stations should pay a higher fee than VHF stations because VHF stations have to overcome additional background interference that is prevalent in large cities. In the 2020 Regulatory Fee Reform Order, we declined to categorically lower regulatory fees for VHF stations to account for signal limitations, and concluded that there is nothing inherent in VHF transmission that creates signal deficiencies but that environmental noise issues can affect reception in certain areas and situations. As such, we grant VHF stations that operate at higher power levels to overcome interference an assessed amount at power levels authorized by our rules.

D. Radio Broadcaster Regulatory Fees

14. The FY 2020 NPRM proposed the same methodology for assessing radio broadcasters as in prior years. This methodology involves first identifying the FTEs doing work directly benefitting regulatees. The total collection target is then allocated across all regulatory fee categories based on the number of total FTEs. Each regulatee within a fee category then pays its proportionate share based on an objective measure of size (e.g., revenues or number of subscribers). The methodology, as is the case with many regulatees, uses both population and type of license as a metric for benefit afforded the payor.

15. Use of this methodology results in net increases in the amount of regulatory fees assessed to radio broadcast categories compared to FY 2019. In continuing to review our unit numbers, however, we discovered a computational error and correct it here by increasing the number of units used in the calculation from 9,636 to 9,831 which results in lower fees than proposed in the FY 2020 NPRM. Below is a chart showing the regulatory fees by category of radio broadcaster for FY 2020 adjusted to account for the correction:

16. Radio broadcasters argue that any increases to their regulatory fees for FY 2020 are unreasonable because the total amount appropriated to the Commission for FY 2020 did not increase from FY 2019, and the number of FTEs in the Media Bureau increased by only one from FY 2019. Accordingly, they claim that the regulatory fees for radio broadcast categories for FY 2020 should be frozen at their FY 2019 levels. The radio broadcasters' arguments, however, reflect an incomplete understanding of the methodology that the Commission has used for years. As described above and in the FY 2020 NPRM, the long-standing methodology for assessing regulatory fees involves multiple factors besides the amount of appropriation to be recovered and the number of direct FTEs. Specifically, two factors affecting calculation of radio broadcasters' fees changed significantly between FY 2019 and FY 2020, and resulted in the increase in regulatory fees for radio broadcasters. First, the Media Bureau's allocation percentage increased from 35.9% in FY 2019 to 37.3% in FY 2020. (Mathematically, the year-to-year change in the absolute number of direct FTEs in a core bureau does not by itself determine the share of overall regulatory fees that should be borne by regulatees of that bureau, because the bureau's allocation percentage also depends on the overall number of Commission direct FTEs, which changes year to year.) Furthermore, because indirect FTEs are proportionately allocated by a bureau's share of direct FTEs, this increase in the percentage of direct FTEs also resulted in an increase in the amount of indirect FTEs being allocated to Media Bureau fee categories. This then resulted in an increase in the overall fees for radio broadcasters as a group. Second, the total number of radio broadcasters (projected fee-paying units) unexpectedly dropped by 180 from FY 2019 to FY 2020. The net effect of these two changes resulted in increased regulatory fees for individual radio broadcaster fee paying units for FY 2020.

17. We disagree with the radio broadcasters that we should ignore our long-standing methodology in order to freeze regulatory fees for (and thus benefit) radio broadcasters at the expense of other regulatees (such as television broadcasters). Because the Commission is statutorily obligated to recover the amount of its appropriation through regulatory fees, these fees are a zero-sum situation. Thus, if the Commission freezes one set of regulatees' fees, it would need to increase another set of regulatees' fees to make up for any resulting shortfall in a way that is inconsistent with the longstanding methodology described in the FY 2020 NPRM. We accordingly decline to freeze the radio broadcaster regulatory fees at their FY 2019 levels and instead adopt the radio broadcaster fees as adjusted in this Report and Order.

E. Toll Free Numbering Regulatory Fees

18. Toll free numbers allow callers to reach the called party without being charged for the call. With toll free calls, the charge for the call is paid by the called party (the toll free subscriber) instead. ATL Communications, a RespOrg, filed comments to the Commission's proposed regulatory fees for fiscal year 2020. In its comments, ATL does not address the issues that are the subject of this proceeding, but instead raises specific questions related to international toll free calls involving Canada, tracking fee exemptions, control and ownership of toll free numbers, and the consequences for failure to pay assessed regulatory fees. Upon review, we find no convincing evidence in ATL's comments that warrants a change to the regulatory fee obligation, as it applies to toll free numbers.

F. Market Access Space Station Regulatory Fees

19. In the 2020 Regulatory Fee Reform Order, we concluded that non-U.S. licensed space stations granted access to the market in the United States (market access grants) will be included in the FY 2020 GSO and NGSO space station regulatory fees. In the FY 2020 NPRM, we accordingly proposed to collect regulatory fees from most, but not all, non-U.S. licensed space stations granted U.S. market access, and we follow through and adopt such fees here.

20. We disagree with the two commenters that assert that we do not have such authority. We will not repeat the lengthy analysis from the 2020 Regulatory Fee Reform Order here, but will summarize the issues.

21. The core of our analysis is that we impose fees on regulatees that reflect the “benefits provided to the payor of the fee by the Commission's activities.” Holders of market access grants clearly benefit from the activities of the Commission—and nothing in the language of the Act suggests Congress intended to preclude such entities from the ambit of regulatory fees. We conclude that the legislative history of the Act posed no bar to assessing regulatory fees on non-U.S. licensed space stations granted U.S. market access via the formal process first adopted by the Commission in 1997.

22. 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. The Commission's methodology for assessing regulatory fees must “reflect the full-time equivalent number of employees within the bureaus and offices of the Commission, adjusted to take into account factors that are reasonably related to the benefits provided to the payor of the fee by the Commission's activities.” Our order amply explained how requests for market access have become a significant portion of the applications processed by the Commission and that holders of market access grants regularly participate in Commission activities. Thus, such entities derive many benefits from the activities of Commission staff. Additionally, commenters argue that non-U.S.-licensed space stations are not subject to regulatory fees because they provide “nonregulated services.” The argument ignores the fact that operators of non-U.S.-licensed space stations granted market access are subject to the same service rules and operating conditions as those that apply to U.S. licensed operators.

23. We also disagree with arguments that the proposed regulatory fees for non-U.S licensed space stations with U.S. market access grants are too high because we set the same regulatory fee for U.S. licensed and non-U.S. licensed space stations. As we discussed in the FY 2020 NPRM, the number of space stations seeking U.S. market access has continued to increase each year; in 2019 there were more market access petitions than U.S. space station applications. In addition, as we noted, foreign-licensed space station operators participate actively in Commission rulemaking proceedings and benefit from Commission monitoring and enforcement activities. We concluded that the Commission devotes significant resources to processing the growing number of market access petitions of non-U.S. licensed satellites and that those foreign licensed satellites with U.S. market access benefit from much of the same oversight and regulation by the Commission as the U.S. licensed satellites. For that reason, we concluded that assessing the same regulatory fees on non-U.S. licensed space stations with market access grants as we assess on U.S. licensed space stations will better reflect the benefits received by these operators through the Commission's adjudicatory, enforcement, regulatory, and international coordination activities and will promote regulatory parity and fairness among space station operators by evenly distributing the regulatory cost recovery.

24. Finally, the non-U.S. licensed satellite operators argue that they should not pay the same amount of indirect costs as the U.S. licensed satellite operators because they receive fewer benefits from the Commission. They contend that the Commission's regulatory activity at international organizations is designed to promote and protect the interests of U.S. satellite operators and that the indirect FTEs across the agency largely support U.S. telecommunications policy.

25. U.S. licensed satellite operators disagree and observe that the non-U.S. licensed satellite operators receive the same or more benefits from the Commission as do U.S. licensed satellite operators. They observe that in another proceeding the non-U.S. licensed operators in the C-Band Alliance have stressed the practical similarities between the market access grants and U.S. licensed space stations. SpaceX contends that the foreign licensed operators overlook the tremendous benefit of access to the U.S market and that the Commission's regulatory activities maximize the value of the market access.

26. We find that the non-U.S. licensed operators are ignoring the fact that the Commission devotes significant resources to processing the growing number of market access petitions of foreign licensed satellites and that the foreign licensed satellite operators benefit from much of the same oversight and regulation by the Commission as the U.S. licensed satellites, such as processing a petition for market access requires evaluation of the same legal and technical information as required of U.S. licensed applicants. The operators of non-U.S. licensed space stations also benefit from the Commission's oversight efforts regarding all space and earth station operations in the U.S. market, since enforcement of Commission rules and policies in connection with all operators provides a fair and safe environment for all participants in the U.S. marketplace. Thus, the significant benefits to non-U.S. licensed satellites with U.S. market access support including them in the GSO and NGSO regulatory fee categories for U.S. licensed space stations.

27. To the extent some commenters argue that foreign licensed space stations do not benefit from Commission regulatory activity after the space station is operational, and that compliance with market access conditions are pre-operational assessments that occur before the licensee is subject to any regulatory fees, we disagree. Both U.S. licensed space stations and non-U.S. licensed space stations often make changes to their operations after they have been brought into service, through modification applications or petitions. Ongoing U.S. licensed and non-U.S. licensed space station operations are subject to, and benefit from, the rulemaking and other regulatory activities described above during the entire service period of the space station. In addition, we do not agree that the relevant processing costs incurred should only be assessed in the country where the space station is licensed, and that assessing fees in the United States for the same processing costs would be duplicative. Moreover, the Commission's substantial regulatory efforts for satellite services benefit non-U.S. licensed space station operators with market access and it would be inequitable to continue charging only U.S. licensees for these benefits to foreign operators.

28. Commenters also argue that we should exempt or adopt a reduced fee for non-U.S. licensed GSO satellites in certain circumstances. We adopt one of these proposals and reject the others. Eutelsat argues that U.S. licensed earth stations onboard vessels (ESVs) operating outside U.S. territorial waters and communicating with foreign licensed satellites should not be subject to regulatory fees.

29. Eutelsat argues that U.S. licensed earth stations onboard vessels (ESVs) operating outside U.S. territorial waters and communicating with foreign licensed satellites should not be subject to regulatory fees. These operations are similar, in regulatory treatment, to those of earth stations aboard aircraft (ESAAs) operating outside the United States and communicating with non-U.S. licensed space stations. We agree that the same rationale also applies here. Accordingly, non-U.S. licensed space stations that are listed as a point of communication on ESV licenses are exempt from the regulatory fee obligations if the ESV license clearly limits U.S. licensed ESV terminals' access to these non-U.S. licensed space stations to situations in which these terminals are in foreign territories and/or international waters and the license does not otherwise allow the non-U.S. licensed space station access to the U.S. market.

30. Two commenters propose fee exemptions for certain non-U.S. licensed satellite systems based on the theory that they are not actually providing services in the United States. Astranis proposes that foreign licensed satellites accessing U.S. gateway/feeder link earth stations should be exempt from regulatory fees, because these satellites are not providing commercial services to the U.S. market but are just obtaining services from the U.S.-based earth stations. Astranis argues, the provision of gateway or feeder link services to foreign satellites is a benefit to the earth station operators. AWS proposes that non-U.S. licensed NGSO systems that downlink traffic to U.S. licensed earth stations, solely for immediate transit outside the United States and not intended for U.S. customers, should be exempt from regulatory fees. We disagree with both proposals. Unlike the limited exemptions adopted for operations exclusively outside the United States or for TT&C operations that are directed to the safe and effective operation of the satellite in orbit, the proposed exceptions are for services provided in the United States and involve data operations unrelated to the safe and effective satellite operations in orbit. These data services could involve significant data exchange traffic in the United States. Feeder link earth stations are located in the United States and carry data to and from various users. Further, the direction of the data flow is irrelevant in the context of regulatory fees. We therefore reject both proposals.

31. Two commenters propose exemptions or reduced fees based on coverage area. Astranis proposes that we adopt a tiered fee structure based on the U.S. population with the satellite's coverage area, so that the non-U.S. licensed satellite regulatory fee can more directly relate to the costs incurred by the Commission and benefits received by the U.S. and foreign licensed payors. SES proposes that foreign licensed satellites whose U.S. coverage is limited to one or more territories in the Pacific Ocean (Guam, American Samoa, Midway Island, Wake Island, and the Northern Mariana Islands) be exempt from regulatory fees because of the distance from mainland United States and the few number of potential customers located on these islands. Astranis contends that similar considerations apply to other remote and underserved areas, such as Alaska, Hawaii, and U.S. Caribbean territories. It argues an exception for these areas would allow satellite operators to better meet the Commission's goal of affordable, high-speed internet access in those underserved areas, and therefore should be exempt from regulatory fees for satellites with a service area outside the contiguous United States comprising less than one percent of the U.S. population. Telesat disagrees with this proposal to exempt non-U.S. licensed satellites from regulatory fees because these factors would apply equally to U.S. licensed satellites and also to other geographic areas. Telesat suggests that if a foreign or U.S. licensed operator contends that under certain facts it would be inappropriate to pay regulatory fees, they should request a waiver. We agree with Telesat and reject the argument for exemptions or reduced fees based on the U.S. geographic areas served by the space station. Commenters have not shown that providing service to a remote area would reduce the International Bureau's costs or affect the benefits to the regulatee.

G. Non-Geostationary Orbit Space Station Regulatory Fees

32. In the 2020 Regulatory Fee Reform Order we decided to allocate 80% of space station fees to GSO space stations and 20% of space stations fees to NGSO space stations based upon the number of applications processed, the rulemakings, and the number of FTEs working on oversight for each category of operators. In response to the proposed GSO and NGSO regulatory fees in the FY 2020 NRPM, commenters assert that we should adopt separate fee categories for distinct types of NGSO systems, argue we should phase in the NGSO fee increase and not increase by more than 7.5% per year, and question the accuracy of our list of non-U.S. licensed space stations granted market access that would be subject to regulatory fees. We find that there is not sufficient evidence in the record to establish different fees for NGSO systems at this time and will seek comment on the issue in future rulemaking. We decline to phase in the NGSO fee increase as inconsistent with section 9 of the Act and adopt the proposed fees, adjusted to take into account changes to the number of assessible satellites. We agree, however, with the suggestion to publish a list of the space stations and systems in operation that would be subject to regulatory fees and attach such list in Table 8.

33. We disagree with commenters that object to the proposed fees for NGSO systems as too high for certain NGSOs and contend that the Commission should adopt separate fee categories for distinct types of NGSO systems, that the Commission should apportion the FTEs based on different types of NGSOs, or that we have not established that the actual benefits provided to NGSO payors are equal. That NGSO systems may differ in size or other characteristics does not preclude grouping them in the same fee category. The Commission groups similar services for regulatory fee purposes, regardless of the varying regulatory obligations of each entity and without calculating how many FTEs are devoted to each individual regulation, because activity levels and participation in specific proceedings may change from year to year, such as when interconnected Voice over internet Protocol (VoIP) providers were added to the interstate telecommunications service providers (ITSP) category. We did not propose differential treatment of NGSOs in the FY 2020 NPRM, and we do not see compelling reasons to deviate from our traditional assessment methods based on the record before us now.

34. Some contend that given the broad range of NGSO networks serving or planning to serve the United States market, the Commission should adopt a multi-tiered approach based on total number of satellites deployed and total transmit bandwidth. SpaceX contends that these commenters have not shown any meaningful tie between the number of satellites in an NGSO system and the use of Commission resources. We agree that there is not sufficient evidence in the record to establish different fees for sized NGSO systems. Accordingly, we will seek further comment in future rulemaking.

35. We disagree with commenters who argue that the proposed increase in NGSO regulatory fees requires us to phase in the fee increase over time, and not increase by more than 7.5% per year. SpaceX argues that the significant increase in fees for NGSO systems justify a 7.5% cap. We disagree. A cap for one fee category would result in an increase in the other fee categories. We are required under section 9 of the Act to adopt fees that “reflect the full-time equivalent number of employees within the bureaus and offices of the Commission, adjusted to take into account factors that are reasonably related to the benefits provided to the payor of the fee by the Commission's activities.” And given the large amount of work the Commission has done on NGSO systems over the past year, we find the benefits of Commission oversight for such systems substantial. For these reasons, we decline to adopt a phased in approach or a cap in regulatory fees.

36. Finally, commenters raise issues with the accuracy of our list of non-U.S. licensed space stations granted market access that would be subject to regulatory fees. Eutelsat contends that the Commission erroneously included Eutelsat 172B as both U.S. and foreign licensed and it should be removed from the foreign licensed list. Commenters propose that the Commission identify the U.S. licensed and foreign licensed GSO and NGSO space stations that will be subject to regulatory fees to enable operators to review the list for accuracy. Telesat disagrees and suggests that any errors can be resolved by discussions with individual operators. We agree with the suggestion to publish list the space stations and systems in operation that would be subject to regulatory fees. We have attached the list of U.S. licensed operators and foreign licensed operators with U.S. market access in Table 8 and any party identifying an error should advise Commission staff by contacting the Financial Operations Help Desk at 877-480-3201, Option 6.

H. International Bearer Circuit Regulatory Fees

37. In the FY 2020 NPRM, we sought comment on the allocation of IBC fees and adopting new tiers for the fees. As discussed below, we find that capacity is an appropriate measure by which to assess IBC fees. We also find that the allocation between submarine cables and terrestrial and satellite circuits should be changed to reflect the changing distribution of international capacity as more and larger submarine cables are put into service. Hence, we do not adopt a unified tier structure at this time but will continue to assess fees based on active terrestrial and satellite circuits and on lit capacity of submarine cables. We do, however, adjust the tiers for submarine cables.

38. IBC regulatory fees reflect the work performed by the International Bureau, primarily the Telecommunications and Analysis Division and the Office of the Bureau Chief, for the benefit of all U.S. international telecommunications service providers, and our submarine cable licensees. International telecommunications service is provided over terrestrial, satellite, and submarine cable facilities. In the 2020 Regulatory Reform Order, we concluded, based on a review by the International Bureau, that eight FTEs should be allocated to IBCs for regulatory fee purposes, and 20 FTEs to the satellite category.

39. IBC fees consist of (1) active terrestrial and satellite circuits, and (2) lit submarine cable systems. Prior to 2009, IBC fees were collected based on the number of 64 kbps circuits for each of the three types of facilities used to provide international service. In 2009, the Commission changed the methodology for assessing IBC fees from basing the fee on 64 kbps circuits for all types of IBCs to assessing fees for submarine cable operators on a per cable landing license basis, with higher fees for larger capacity submarine cable systems and lower fees for smaller capacity submarine cable systems. The Commission concluded that this methodology served the public interest and was competitively neutral because it included both common carriers and non-common carriers. Under this bifurcated approach, based on the 2009 Consensus Proposal from the submarine cable operators, 87.6% of IBC fees were assessed to submarine cable systems and 12.4% to terrestrial and satellite facilities based on relative capacity at the time. The Commission adopted a five-tier structure for assessing fees on submarine cables systems, and a per gigabits per second (Gbps) assessment for terrestrial and satellite facilities based on active circuits. The fee assessment on submarine cables cover the costs for regulatory activity concerning submarine cables as well as the services provided over the submarine cables.

1. Using Capacity To Assess IBC Regulatory Fees

40. We start by reaffirming that IBC regulatees with higher capacity receive a greater benefit from the Commission's work and should be assessed accordingly. The Commission has historically used capacity to assess IBCs. The Commission continued to assess IBC fees on active 64 kbps circuits until 2009 when it adopted a new fee structure that assesses fees on international submarine cable systems, but that new structure still used capacity of the cable system for determining the fees with smaller submarine cable systems paying a lower fee than larger systems. Terrestrial and satellite facilities continued to have IBC fees assessed on a 64 kbps circuit capacity basis until 2018 when the Commission began assessing the fees based on Gbps.

41. This year the International Bureau undertook a review of its work, staffing, and distribution of responsibilities benefiting its fee payors, between the Telecommunications and Analysis Division and the Satellite Division and based on this review, we allocated eight FTEs to the international bearer circuit category. The Commission found that almost all of the IBC work benefits all international telecommunications service providers no matter what facilities those services are provided over—submarine cable systems, terrestrial facilities, or satellites. Submarine cable licensees benefit from work that includes among others, maintaining the licensing database, enforcing benchmarks, coordination with other U.S. Government agencies, including coordinating with other U.S. agencies' undersea activities to protect submarine cables, protecting U.S. customers and consumers from anticompetitive actions by foreign carriers, licensing international section 214 authorizations and submarine cables including review of transactions, and representing U.S. interests at bilateral and multilateral negotiations and at international organizations. The Commission's activities make it possible for submarine cable operators and other IBC providers to provide service to their customers. Those operators of facilities with larger capacity to carry more data derive a greater benefit from the Commission's work in this regard.

42. Several commenters retread well-trodden ground to object to this assessment, but we find yet again that they have not provided a rationale to alter our assessment of fees within the IBC category based on capacity. Contrary to the Submarine Cable Coalition's argument that basing fees on capacity is unlawful, use of capacity is a fundamental premise of how the Commission assesses regulatory fees. Licensees with larger facilities benefit more from the Commission's work and thus should pay a larger proportion of the Commission's costs—just as we have found that licensees with more customers (like MVPD subscribers or commercial mobile radio service (CMRS) subscribers) or with more revenues (such as ITSPs) benefit more from the Commission's activities. CenturyLink states that to the extent that those FTEs working on issues that benefit IBC regulates as a whole, it is reasonable to use capacity to allocate the fees among the regulatees. We agree (as the Commission has long held) that capacity is a reasonable basis in the context of IBCs to assess those costs among the regulatees that benefit from that work.

43. We also once again reject assertions that only the work of two FTEs benefits submarine cable operators. The North American Submarine Cable Association (NASCA) points to a 2014 order, arguing that the Commission found that only two FTEs work to the benefit of submarine cable operators and that should be reflected in the regulatory fees. Although the Commission explained in 2015 that this was a misstatement, NASCA continues to cite this as part of its arguments. The Submarine Cable Coalition similarly argues that the Commission provides limited benefits to submarine cable operators. CenturyLink disagrees and argues the commenters have not provided a sound explanation why using capacity is unreasonable or prohibited by section 9. And indeed, we reject NASCA's and the Submarine Cable Coalition's arguments that submarine cables benefit only from a limited number of FTEs as suggested six years ago—we conducted an FTE reevaluation prior to setting the FY 2020 IBC fees and the benefits attributable submarine cables are reflected in the proposed fees.

44. We also reject the argument that submarine cables do not benefit from the Commission's IBC work because most submarine cables operate on a non-common carriage (or private carriage) basis. Since 2009, the Commission has assessed regulatory fees on both common carrier and non-common carrier submarine cable systems, as requested by industry in the Consensus Plan, and because both benefit from the landing licenses issued by the Commission. We also note that terrestrial and satellite IBC fees are assessed on both common carrier and non-common carrier circuits. Further, while a submarine cable may operate on a non-common carrier basis, the traffic carried on the submarine cable includes common carrier traffic.

2. Division of IBC Regulatory Fees

45. In the FY 2020 NPRM, we proposed to change the allocation of the IBC fees between submarine cable systems and terrestrial and satellite facilities. Since 2009, 87.6% of IBC fees have been allocated to submarine cables and 12.4% to terrestrial and satellite facilities. This allocation was adopted in the Submarine Cable Order (74 FR 22104 (May 12, 2009)) and was based on the relative circuits in 2008.

46. Based on the minimum capacity for the 2019 rate tiers for regulatory fees paid for submarine cables in FY 2019 (meaning a licensee that paid the rate for a capacity of 4000 Gbps or higher on the submarine cable is presumed to have a capacity of 4000 Gbps), the Commission calculated that the ratio between submarine cable and terrestrial and satellite IBCs is at least 90.8% submarine cable and no more than 9.8% terrestrial and satellite circuits. This calculation, assuming lit capacity at the minimum capacity in the tier, substantially undercounts actual lit capacity in these submarine cables therefore an upward adjustment of 5% more closely approximates actual lit capacity numbers. The Commission concluded that a ratio attributing 95% to submarine cables and 5% to terrestrial and satellite circuits would be more reasonable than the historic ratio and sought comment on this reallocation.

47. CenturyLink supports the proposal to allocate 95% of IBC fees to submarine cable and 5% to satellite and terrestrial IBCs. SIA argues that the 95%/5% allocation continues to underestimate submarine cable capacity and that the allocation should be closer to 98.3%/1.7%, but it does not provide any support for this proposed allocation. Based on the record, we are adopting our proposed reallocation between submarine cable and satellite and terrestrial IBCs, as we proposed in the FY 2020 NPRM.

3. IBC Regulatory Fee Tiers

48. In the FY 2020 NPRM, we also sought comment on combining the submarine cable and terrestrial and satellite IBC categories and assessing IBC fees based on a unified fee structure. Under this proposal, terrestrial and satellite IBC owners would pay regulatory fees based on the number of active international circuits using the rates set out in the proposed tiers. Submarine cable operators would continue to pay regulatory fees for each international submarine cable system based on the lit capacity of the cable system using the same tiers. Commenters generally oppose the proposal to unify the two categories and we decline to adopt it here, arguing that a combined tier structure would increase IBC fees paid by satellite operators, but obtain no additional benefit from this tiered structure. SES and SIA further contend that we should eliminate regulatory fees for satellite IBCs. They observe that we previously rejected tiers for terrestrial and satellite IBCs due to the wide range of numbers of circuits among carriers and that tiers could result in large increases in fees, and so satellite IBCs should continue to pay a fee on the basis of a Gbps circuit.

49. Based on the comments, we decline to adopt the proposed unified tier structure at this time. Instead, we adopt the alternative proposal in the FY 2020 NPRM to maintain our current fee structure and will continue to assess regulatory fees for terrestrial and satellite IBCs on a per Gbps circuit basis. We will use a six tier structure for fees assessed to submarine cable systems, using lit capacity of the cable system.

50. We reject, again, using a flat rate for submarine cables. NASCA contends that the industry proposal that the Commission adopted in 2009 was meant to replace capacity-based fees with a flat fee per submarine cable system. The Commission has previously addressed this issue and rejected adopting a flat fee for submarine cables. Contrary to NASCA's assertion, the Commission never indicated in the Submarine Cable Order that it intended to move to a flat fee and indeed it specifically stated that over time the categories of small and large systems will change as systems grow in capacity. The Commission updated the tiers in 2018 to reflect the increasing capacity of submarine cable systems and we do so again this year.

4. Submarine Cable IBC Regulatory Fees

51. Since FY 2009, when the Commission established a new methodology for assessing submarine cable fees, the level of capacity for submarine cable systems has increased by leaps and bounds. The Commission has expanded the different tiers to accommodate for this rapid expansion in growth. However, the basic methodology for calculating submarine cable fees has not changed since FY 2009. Submarine cable fees are still calculated on the basis of “1” unit, “.5” units, “.25” units and so forth. In the FY 2020 NPRM, the proposed basic unit of fees remained at “1” unit, and this “1” unit is at the fee level of $295,000 and at the tier threshold of 3,500-6,500 Gbps. The tier threshold at 2,000-3,500 Gbps constituted “.5” units ($147,500), while the tier level above 6,500 Gbps ($590,000), as proposed, was double the “1” unit fee and constituted “2” units. The basic methodology for calculating submarine cable fees had not changed, just expanded to include a level above “1” unit due to increases in capacity.

52. Some commenters argue that calculations underlying this year's regulatory fees are incorrect. CenturyLink states that the proposed fees have calculation errors and will result in an overcollection of over $11 million. NASCA contends that the wrong denominator was used in the calculation of submarine cable fee—the number of licensed cables, 53, should be the denominator instead of the number of payment units. This erroneous calculation would lead to an overcollection of $14,128,475. And AT&T does its own calculations to come up with its own tier structure.

53. Submarine cable system operators are not currently required to disclose the lit capacity of their submarine cable systems to the Commission. In the absence of such data, the Commission must rely on estimates based on the submarine cable system fee payor's past certifications that accompany their regulatory fee payments. Both NASCA and the Submarine Cable Coalition have filed data about the current lit capacity of their members' submarine cable systems to provide a factual basis for us to conclude a higher number of fee payors will be paying at the highest level. Taking the new information into account and applying the new top tier ratio, we adopt the following submarine cable systems regulatory fee tiers:

54. With these adjustments, the new fees for submarine cable systems are: $430,000 for capacities of 6,500 Gbps or greater; $215,000 for capacities of 3,500 Gbps or greater but less than 6,500 Gbps; $107,500 for capacities of 1,500 Gbps or greater but less than 3,500 Gbps; $53,750 for capacities of 250 Gbps or greater but less than 1,500 Gbps, $26,875 for capacities of 50 Gbps or greater but less than 250 Gbps; and $13,450 for capacities less than 50 Gbps.

55. These changes reduce the highest tier from $590,000 to $430,000 using a “2” unit fee, the “1” unit fee from $295,000 to $215,000, the “.5” unit fee from $147,500 to $107,500, the “.25” unit fee from $73,750 to $53,750, the “.125” unit fee from $36,875 to $26,875, and the “.0625” unit fee from $18,450 to $13,450.

56. The Submarine Cable Coalition contends that the high regulatory fees impact the competitiveness and desirability of United States as a landing location, and so operators may elect to obtain licenses in Canada or Mexico, even if a significant portion of the traffic on the cable is intended for or would originate from destinations in the United States. While we recognize that regulatory fees are a factor for the industry to consider in their business plans, we cannot adjust regulatory fees based on fees assessed in other countries. Instead, we are required by section 9 of the Act to base regulatory fees on the FTEs in the bureaus and offices in the Commission “adjusted to take into account factors that are reasonably related to the benefits provided.”

57. Finally, NASCA argues that the Commission should charge fees based on active capacity rather than lit capacity. NASCA notes that “active” capacity is revenue-generating while “lit” capacity is merely electronically enabled capacity and does not equate to revenue-generating capacity. NASCA and the Submarine Cable Coalition assert that failure to define and distinguish between “active” and “lit” capacity in the FY 2020 NPRM creates ambiguities that could lead to gamesmanship if regulated parties seek to lower regulatory fees owed.

58. We clarify that submarine cables will be assessed IBC fees based on “lit” capacity. As the Commission explained in the FY 2019 Report and Order, the submarine cable IBCs are based on the lit capacity of the submarine cable as of December 31 of the previous year, in this case December 31, 2019. The Commission uses lit capacity “because that is the amount of capacity that submarine cable operators are able to provide services over and the regulatory fee is in part recovering the costs related to the regulation and oversight of such services.” We believe that the term “lit capacity” is a well-established industry terminology and its use will less likely to create any ambiguity that may lead to gamesmanship.

I. Flexibility for Regulatory Payors Given the COVID-19 Pandemic

59. In the FY 2020 NPRM, we sought comment on providing relief to regulatees whose businesses have suffered financial harm due to the pandemic. At the outset, we noted the statutory constraints the Commission faces in providing relief from fee payment—its obligations to collect $339,000,000 in FY 2020 regulatory fees and to fairly and proportionately allocate the burden of those fees among regulatees, and the Commission's inability to exempt regulatees other than those expressly exempt in the statute. We asked commenters to suggest relief measures the Commission might implement within the statutory limitations we described.

60. All of the comments we received in response to our request support the provision of regulatory relief to regulatees financially harmed by the pandemic. The majority of comments were filed by or on behalf of broadcasters and of those, all oppose increasing FY 2020 broadcaster regulatory fees, urging the Commission to either suspend the fee increases or waive altogether FY 2020 broadcaster regulatory fees. Commenters also suggest the Commission waive the 25% penalty for broadcasters that do not pay their fee by September 30, 2020 and extend the September 30 deadline.

61. Several commenters suggest that the Commission relax its standard for waiver requests, including to permit consideration of waiver requests by parties that are red lighted for other debt owed to the Commission and to allow waiver of the portion of fees attributable to any month a station has been off the air. Others suggest simplifying the waiver filing process to be more “easily navigable and inexpensive” for small broadcasters in particular, including to permit a single letter filing for both waiver and deferral requests. Another commenter urges the Commission to modify the financial documentation it considers germane to demonstrate financial hardship, to account for current circumstances in which previously financially healthy broadcasters are experiencing significant financial distress owing to the pandemic.

62. Several commenters support the expanded use of the Commission's installment payment program for regulatees unable to pay their fees by the September 30 deadline, urging the Commission to offer installment payment terms of 6-12 months and beyond, deferred lump sum payments, nominal interest rates, no down payment, and simplify the documents required to obtain an installment payment agreement.

63. We take several steps to address the concerns raised by commenters. First, we simplify our filing requirements for waiver, reduction, and deferral requests for FY 2020 fees to ensure that regulatees needing assistance are not precluded from requesting it on procedural grounds. Section 1.1166(a) of the Commission's rules requires requests for waiver, reduction, or deferral to be filed as separate pleadings and states that “any such request that is not filed as a separate pleading will not be considered by the Commission.” Given the ongoing pandemic, we temporarily waive this rule to permit parties seeking fee waiver and deferral for financial hardship reasons to make a single request for both waiver and deferral. We also temporarily waive § 1.1166(a) of our rules to direct requests to be submitted electronically to the following Commission email address: 2020regfeerelief@fcc.gov.

64. Second, we temporarily waive our rules to the extent necessary so that parties seeking extended payment terms for FY 2020 regulatory fees may do so by submitting an email request to the same email address: 2020regfeerelief@fcc.gov. Installment payment requests may be combined with waiver, reduction, and deferral requests in a single request.

65. Third, we exercise our discretion under section 3717(a) of the Debt Collection Improvement Act of 1996, as amended, to reduce the interest rate the Commission charges on installments payments to a nominal rate—and we exercise our discretion to forego the down payment normally required before granting an installment payment request.

66. Fourth, we recognize that demonstrating financial hardship caused by the pandemic may require different financial documentation than the documentation the Commission has traditionally accepted. While the burden of proving financial hardship remains with the party requesting it, we direct the Managing Director to work with individual regulatees that have filed requests if additional documents are needed to render a decision on the request.

67. Fifth, we waive in part our red light rule to allow debtors that are experiencing financial hardship to nonetheless request relief with respect to their regulatory fees. Under the red light rule, the Commission will not act on any application or request for relief if the requesting party has not paid a debt owed to the Commission. In light of the pandemic, we find that temporary waiver of the red light rule, at the Managing Director's discretion, to permit regulatees that are experiencing financial difficulties and that owe other debt to the Commission to request waivers, reductions, deferrals, and installment payment terms for FY 2020 fees is appropriate. However, those regulatees for whom the red light is waived will be required to resolve all delinquent debt by paying it in full, entering into an installment agreement to repay the debt, and/or if applicable, curing all payment and other defaults under existing installment agreements.

68. We direct the Managing Director to release one or more public notices describing in more detail the enhanced relief we will provide to regulatees whose businesses have been affected by the pandemic, with filing and other instructions as needed.

69. Finally, we address the suggestions that would contravene the statute or our precedent. We cannot waive FY 2020 fees or the 25% late payment penalty for any group of broadcasters because doing so would effectively exempt the group, when the statute does not permit such an exemption, but instead requires a case-by-case determination in order to waive a fee or penalty. Similarly, we cannot reduce broadcaster fees except on a case-by-case basis. And we cannot suspend the FY 2020 fee increases solely because advertising revenues have dropped. We cannot extend the September 30 deadline, as September 30 marks the end of our fiscal year and we are required to collect FY 2020 fees by fiscal year end.

70. We also cannot relax the standard we employ for fee waiver, reduction, or deferral based on financial hardship grounds. Section 9A of the Act permits the Commission to waive a regulatory fee, penalty or interest for good cause if the waiver is in the public interest. Where financial hardship is the asserted basis for a waiver, the Commission has consistently interpreted that to require a showing that the requesting party “lacks sufficient funds to pay the regulatory fees and to maintain its service to the public.” We believe the existing waiver standard together with the measures described above will work as designed, to provide fee relief to those regulatees most in need. Regulatees whose businesses have been hurt by the pandemic, but not to the extent required to receive a waiver, reduction, or deferral, will be eligible to pay their FY 2020 fees in installments if they show that they cannot pay the fee in lump sum, but can do so with extended payment terms.

III. Procedural Matters

71. Included below are procedural items as well as our current payment and collection methods. We include these payments and collection procedures here as a useful way of reminding regulatory fee payors and the public about these aspects of the annual regulatory fee collection process.

72. Credit Card Transaction Levels. In accordance with Treasury Financial Manual, Volume I, Part 5, Chapter 7000, Section 7045—Limitations on Card Collection Transactions, the highest amount that can be charged on a credit card for transactions with Federal agencies 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 2019 regulatory fee collection in Fact Sheets, https://www.fcc.gov/​regfees.

73. Payment Methods. 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. During the fee season for collecting 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, NY (TREAS NYC). 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. The fax should be sent 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 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.

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

• Media Services: Regulatory fees must be paid for initial construction permits that were granted on or before October 1, 2019 for AM/FM radio stations, VHF/UHF broadcast television stations, and satellite television stations. Regulatory fees must be paid for all broadcast facility licenses granted on or before October 1, 2019.
• Wireline (Common Carrier) Services: Regulatory fees must be paid for authorizations that were granted on or before October 1, 2019. In instances where a permit or license is transferred or assigned after October 1, 2019, 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 § 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, 2019.
• 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, 2019. The number of subscribers, units, or telephone numbers on December 31, 2019 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, 2019, 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 2020.
• Multichannel Video Programming Distributor Services (cable television operators, cable television relay service (CARS) licensees, DBS, and IPTV): Regulatory fees must be paid for the number of basic cable television subscribers as of December 31, 2019. Regulatory fees also must be paid for CARS licenses that were granted on or before October 1, 2019. In instances where a permit or license is transferred or assigned after October 1, 2019, responsibility for payment rests with the holder of the permit or license as of the fee due date. For providers of DBS service and IPTV-based MVPDs, regulatory fees should be paid based on a subscriber count on or about December 31, 2019. In instances where a permit or license is transferred or assigned after October 1, 2019, responsibility for payment rests with the holder of the permit or license as of the fee due date.
• International Services (Earth Stations, Space Stations (GSO and NGSO): Regulatory fees must be paid for (1) earth stations and (2) geostationary orbit space stations and non-geostationary orbit satellite systems that were U.S licensed, or non-U.S. licensed but granted U.S. market access, and operational on or before October 1, 2019. In instances where a permit or license is transferred or assigned after October 1, 2019, responsibility for payment rests with the holder of the permit or license as of the fee due date.

○ For FY 2020 only, non-U.S. licensed GSO and NGSO satellites that have been granted market access to the U.S. through a Petition for Declaratory Ruling (PDR) or through an earth station had until July 15, 2020 to relinquish their market access status to avoid having to pay FY 2020 regulatory fees in September 2020. If non-U.S. licensed GSO and NGSO satellites, either through a PDR or an earth station, still have market access after July 15, 2020, regulatory fees will be assessed, and payment will be required by the due date of FY 2020 regulatory fees.

• International Services (Submarine Cable Systems, Terrestrial and Satellite Services): Regulatory fees for submarine cable systems are to be paid on a per cable landing license basis based on lit circuit capacity as of December 31, 2019. Regulatory fees for terrestrial and satellite IBCs are to be paid based on active (used or leased) international bearer circuits as of December 31, 2019 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 terrestrial and satellite 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, 2019. 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, 2019, responsibility for payment rests with the holder of the permit or license as of the fee due date.

75. Commercial Mobile Radio Service (CMRS) and Mobile Services Assessments. The Commission will compile data from the Numbering Resource Utilization Forecast (NRUF) report that is based on “assigned” telephone number (subscriber) counts that have been adjusted for porting to net Type 0 ports (“in” and “out”). 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).

76. 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.

77. 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, 2019), 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.

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

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

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

81. In addition to financial penalties, section 9(c)(3) of the Act, and § 1.1164(f) of the Commission's rules grant the Commission the authority to revoke authorizations for failure to pay regulatory fees in a timely fashion. Should a fee delinquency not be rectified in a timely manner the Commission may require the licensee to file with documented evidence within sixty (60) calendar days that full payment of all outstanding regulatory fees has been made, plus any associated penalties as calculated by the Secretary of Treasury in accordance with § 1.1164(a) of the Commission's rules, 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.

82. Effective Date. Providing a 30-day period after Federal Register publication before this Report and Order becomes effective as normally required by 5 U.S.C. 553(d) will not allow sufficient time to collect the FY 2020 fees before FY 2020 ends on September 30, 2020. For this reason, pursuant to 5 U.S.C. 553(d)(3), we find there is good cause to waive the requirements of section 553(d), and this Report and Order will become effective upon publication in the Federal Register. Because payments of the regulatory fees will not actually be due until late September, persons affected by this Report and Order will still have a reasonable period in which to make their payments and thereby comply with the rules established herein.

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

84. Final Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of 1980 (RFA) the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) relating to this Report and Order. The FRFA is contained in the back of this rulemaking.

IV. List of 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.

Table 5—Sources of Payment Unit Estimates for FY 2020

In order to calculate individual service fees for FY 2020, we adjusted FY 2020 payment units for each service to more accurately reflect expected FY 2020 payment liabilities. We obtained our updated estimates through a variety of means and sources. 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), Licensing and Management System (LMS) 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. Regulatory fee payment units are not all the same for all fee categories. For most fee categories, the term “units” reflect licenses or permits that have been issued, but for other fee categories, the term “units” reflect quantities such as subscribers, population counts, circuit counts, telephone numbers, and revenues.

We sought verification for these estimates from multiple sources and, in all cases, we compared FY 2020 estimates with actual FY 2019 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 2020 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 2020 payment units are based on FY 2019 actual payment units, it does not necessarily mean that our FY 2020 projection is exactly the same number as in FY 2019. We have either rounded the FY 2019 number or adjusted it slightly to account for these variables.

Table 6—Factors, Measurements, and Calculations That Determine Station Signal Contours and Associated Population Coverages

AM Stations

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

FM Stations

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

Table 9—FY 2019 Regulatory Fees

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.

V. Final Regulatory Flexibility Analysis

85. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was included in the FY 2020 NPRM. The Commission sought written public comment on these proposals including comment on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the IRFA.

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

86. In this Report and Order we adopt our proposal in the FY 2020 NPRM on collecting $339,000,000 in regulatory fees for FY 2020, pursuant to section 9 of the Communications Act of 1934, as amended (Communications Act or Act). These regulatory fees will be due in September 2020. Under section 9 of the Communications Act, regulatory fees are mandated by Congress and collected to recover the regulatory costs associated with the Commission's enforcement, policy and rulemaking, user information, and international activities in an amount that can be reasonably expected to equal the amount of the Commission's annual appropriation. This Report and Order adopts the regulatory fees proposed in the FY 2020 NPRM, with some minor changes.

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

87. None.

C. Response to Comments by the Chief Counsel for Advocacy of the Small Business Administration

88. No comments were filed by the Chief Counsel for Advocacy of the Small Business Administration.

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

89. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules and policies, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA). Nationwide, there are a total of approximately 27.9 million small businesses, according to the SBA.

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

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

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

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

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

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

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

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

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

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

100. Television Broadcasting. This Economic Census category “comprises establishments primarily engaged in broadcasting images together with sound. These establishments operate television broadcasting studios and facilities for the programming and transmission of programs to the public.” These establishments also produce or transmit visual programming to affiliated broadcast television stations, which in turn broadcast the programs to the public on a predetermined schedule. Programming may originate in their own studio, from an affiliated network, or from external sources. The SBA has created the following small business size standard for Television Broadcasting firms: Those having $41.5 million or less in annual receipts. The 2012 Economic Census reports that 751 television broadcasting firms operated during that year. Of that number, 656 had annual receipts of less than $25 million per year. Based on that Census data we conclude that most firms that operate television stations are small. The Commission has estimated the number of licensed commercial television stations to be 1,387. In addition, according to Commission staff review of the BIA Advisory Services, LLC's Media Access Pro Television Database, on March 28, 2012, about 950 of an estimated 1,300 commercial television stations (or approximately 73%) had revenues of $14 million or less. We therefore estimate that the majority of commercial television broadcasters are small entities.

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

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

103. Radio Broadcasting. This Economic Census category “comprises establishments primarily engaged in broadcasting aural programs by radio to the public. Programming may originate in their own studio, from an affiliated network, or from external sources.” The SBA has established a small business size standard for this category, which is: Such firms having $41.5 million or less in annual receipts. Census data for 2012 show that 2,849 radio station firms operated during that year. Of that number, 2,806 operated with annual receipts of less than $25 million per year. According to Commission staff review of BIA Advisory Services, LLC's Media Access Pro Radio Database, on March 28, 2012, about 10,759 (97%) of 11,102 commercial radio stations had revenues of $38.5 million or less. Therefore, most such entities are small entities.

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

105. Cable Television and Other Subscription Programming. This industry comprises establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. The broadcast programming is typically narrowcast in nature (e.g., limited format, such as news, sports, education, or youth-oriented). These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers. The SBA has established a size standard for this industry of $41.5 million or less. Census data for 2012 shows that there were 367 firms that operated that year. Of this total, 319 operated with annual receipts of less than $25 million. Thus under this size standard, most firms offering cable and other program distribution services can be considered small and may be affected by rules adopted.

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

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

108. Direct Broadcast Satellite (DBS) Service. DBS Service is a nationally distributed subscription service that delivers video and audio programming via satellite to a small parabolic dish antenna at the subscriber's location. DBS is now included in SBA's economic census category “Wired Telecommunications Carriers.” The Wired Telecommunications Carriers industry comprises establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution; and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry. The SBA determines that a wireline business is small if it has fewer than 1500 employees. Census data for 2012 indicate that 3,117 wireline companies were operational during that year. Of that number, 3,083 operated with fewer than 1,000 employees. Based on that data, we conclude that most wireline firms are small under the applicable standard. However, currently only two entities provide DBS service, AT&T and DISH Network. AT&T and DISH Network each report annual revenues that are in excess of the threshold for a small business. Accordingly, we conclude that DBS service is provided only by large firms.

109. All Other Telecommunications. “All Other Telecommunications” is defined as follows: This U.S. industry is comprised of establishments that are primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Establishments providing internet services or voice over internet protocol (VoIP) services via client-supplied telecommunications connections are also included in this industry. The SBA has developed a small business size standard for “All Other Telecommunications,” which consists of all such firms with gross annual receipts of $35 million or less. For this category, census data for 2012 show that there were 1,442 firms that operated for the entire year. Of these firms, a total of 1,400 had gross annual receipts of less than $25 million. Thus, most “All Other Telecommunications” firms potentially affected by the rules adopted can be considered small.

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

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

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

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

114. Non-Carrier RespOrgs. Neither the Commission, the Census, nor the SBA have developed a definition of Non-Carrier RespOrgs. Accordingly, the Commission believes that the closest NAICS code-based definitional categories for Non-Carrier RespOrgs are “Other Services Related To Advertising” and “Other Management Consulting Services.”

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

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

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

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

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

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

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

120. This Report and Order adopts the proposals in the Notice to collect $339,000,000 in regulatory fees for FY 2020, as detailed in the fee schedules in Table 5, including the following: (i) An increase in the DBS fee rate to 72 cents per subscriber, per year, based on the Media Bureau FTEs devoted to issues that include DBS. The two DBS providers, AT&T and DISH are not small entities. (ii) The implementation of the new methodology for calculating the full power broadcast television regulatory fees based on the actual population, which the Commission initially adopted in FY 2018 and was transitioning in over two years. Basing the fee on actual population should offer relief to smaller broadcasters, which may include small entities. (iii) An exemption from regulatory fees for non-U.S. licensed space stations that are listed as a point of communication on earth stations onboard vessels (ESV) licenses if the ESV license clearly limits U.S. licensed ESV terminals' access to these non-U.S. licensed space stations to situations in which these terminals are in foreign territories and/or international waters and the license does not otherwise allow the non-U.S. licensed space station access to the U.S. market. This exemption could benefit non-U.S. licensed space stations that are small entities. (iv) The revision of the allocation of IBC fees between submarine cable and terrestrial and satellite IBCs from 87.6%-12.4% to 95%-5%. Any terrestrial or satellite operator with IBCs will benefit. (v) The Report and Order notes that the Media Bureau has granted waivers to allow VHF stations that demonstrate signal disruptions to exceed the maximum power level specified for channels 2-6 in § 73.622(f)(6) and for channels 7-13 in § 73.622(f)(7) and, accordingly, will assess the regulatory fees for those VHF stations that are licensed with a power level that exceeds the maximum based on the maximum power level specified for channels 2-6 in § 73.622(f)(6) and for channels 7-13 in § 73.622(f)(7). To the extent that VHF stations in these circumstances are small entities, this could provide regulatory fee relief. (vi) The adopts two targeted measures to provide relief to Puerto Rico broadcasters. First, we account for the objectively measurable reduction in population by reducing the population counts used in TVStudy by 16.9%, which reflects the decline between the last census in 2010 and the current population estimate. Second, we limit the market served by a primary television stations and commonly owned satellite broadcast stations in Puerto Rico to no more than 3.10 million people, the latest population estimate. Thus, the fee for television broadcasters and commonly owned satellites, using the proposed population fee of $.007837, would not exceed $24,300. (vii) The Order adopts streamlined processes for fee payors that have experienced financial hardship as a result of the Covid-19 pandemic to seek relief and will provide for lowered interest charges on installment payment plans. This could benefit small businesses that experienced financial hardship due to the Covid-19 pandemic.

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

VI. Ordering Clauses

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

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

124. It is further ordered that the FY 2020 section 9 regulatory fees assessment requirements and the rules set forth in the Final Rules are adopted as specified herein.

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

List of Subjects in 47 CFR Part 1

• Administrative practice and procedure
• Broadband
• Reporting and recordkeeping requirements
• Telecommunications

Final Rules

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

PART 1—PRACTICE AND PROCEDURE

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

Authority: 47 U.S.C. 151, 154(i), 155, 157, 160, 201, 225, 227, 303, 309, 332, 1403, 1404, 1451, 1452, and 1455; Sec. 102(c), Div. P, Pub. L. 115-141, 132 Stat. 1084, unless otherwise noted.

2. Section 1.1151 is revised to read as follows:

3. Section 1.1152 is revised to read as follows:

4. Section 1.1153 is revised to read as follows:

5. Section 1.1154 is revised to read as follows:

6. Section 1.1155 is revised to read as follows:

6. Section 1.1156 is revised to read as follows: