82_FR_41124 82 FR 40958 - Scope of NTIA's Authority Regarding FirstNet Fees

82 FR 40958 - Scope of NTIA's Authority Regarding FirstNet Fees

DEPARTMENT OF COMMERCE
National Telecommunications and Information Administration

Federal Register Volume 82, Issue 166 (August 29, 2017)

Page Range40958-40962
FR Document2017-18221

Congress authorized the First Responder Network Authority (FirstNet), an independent authority within the National Telecommunications and Information Administration (NTIA), to assess and collect, among other funds, three specific types of fees. By law, NTIA must review and approve these fees on an annual basis. This final rule describes NTIA's overarching scope, boundaries, and guidelines for its FirstNet fee review and approval process as mandated by the Middle Class Tax Relief and Job Creation Act of 2012 (the Act).

Federal Register, Volume 82 Issue 166 (Tuesday, August 29, 2017)
[Federal Register Volume 82, Number 166 (Tuesday, August 29, 2017)]
[Rules and Regulations]
[Pages 40958-40962]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-18221]


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DEPARTMENT OF COMMERCE

National Telecommunications and Information Administration

47 CFR Chapter V

[Docket No. 151209999-7323-02]
RIN 0660-AA30


Scope of NTIA's Authority Regarding FirstNet Fees

AGENCY: National Telecommunications and Information Administration, 
U.S. Department of Commerce.

ACTION: Final rule.

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SUMMARY: Congress authorized the First Responder Network Authority 
(FirstNet), an independent authority within the National 
Telecommunications and Information Administration (NTIA), to assess and 
collect, among other funds, three specific types of fees. By law, NTIA 
must review and approve these fees on an annual basis. This final rule 
describes NTIA's overarching scope, boundaries, and guidelines for its 
FirstNet fee review and approval process as mandated by the Middle 
Class Tax Relief and Job Creation Act of 2012 (the Act).

DATES: Effective on August 29, 2017.

FOR FURTHER INFORMATION CONTACT: Patrick Sullivan; Office of Public 
Safety Communications; National Telecommunications and Information 
Administration; U.S. Department of Commerce; 1401 Constitution Avenue 
NW., Washington, DC 20230; [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    The Act established FirstNet as an independent authority within 
NTIA charged with ensuring the building, deployment, and operation of 
an interoperable nationwide public safety broadband network 
(Network).\1\ It also requires FirstNet to be self-sustainable.\2\ The 
Act authorizes FirstNet to, among other actions, assess and collect the 
following specific fees: (1) Network user fees, including user fees 
associated with state use of elements of the core network; (2) lease 
fees related to network capacity, pursuant to a covered leasing 
agreement; and (3) fees from entities seeking to access or use any 
equipment or infrastructure constructed or otherwise owned by 
FirstNet.\3\ It requires the total amount of these fees,

[[Page 40959]]

for each fiscal year, to be sufficient, but not to exceed, the amount 
necessary to recoup the total expenses of FirstNet as it carries out 
its duties under the Act.\4\ FirstNet must reinvest amounts received 
from the assessment of these fees for constructing, maintaining, 
operating, or improving the Network.\5\ Finally, as an element of 
NTIA's oversight responsibilities for FirstNet, NTIA must review these 
fees on an annual basis, and such fees may only be assessed if approved 
by NTIA.\6\
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    \1\ See 47 U.S.C. 1426(a)-(b)(1).
    \2\ See 47 U.S.C. 1428(b).
    \3\ See 47 U.S.C. 1428(a); 47 U.S.C. 1442(f).
    \4\ See 47 U.S.C. 1428(b).
    \5\ See 47 U.S.C. 1428(d).
    \6\ See 47 U.S.C. 1428(c).
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    This action: (1) Adopts the tenets of the proposed rule; (2) finds 
that Congress established a statutory framework for NTIA to use to 
determine the reasonableness of FirstNet's proposed fees; (3) 
establishes the scope of NTIA's fee review and approval process in 
fulfillment of the Act's requirements that FirstNet be self-sustainable 
and invest back into the Network; (4) defines the fees subject to NTIA 
review; and (5) details NTIA's fee review and approval methodology, 
timing, and process.
    NTIA published a proposed rule for this action on December 15, 2015 
(80 FR 77592). The preamble to the proposed rule gives more background 
and information on FirstNet's and NTIA's respective duties with regard 
to the Network and related fees and other income, and describes the 
scope and method of NTIA's fee review and approval process, which are 
not repeated here.

II. Response to Comments

    The comment period on the proposed rule ended on January 14, 2016. 
NTIA received eight comments: two from states, one from a local public 
safety organization, one from a telecommunications service provider, 
and four from trade associations. Comments on the proposed rule 
included several similar positions, inquiries both within and outside 
the scope of the rule, and recommendations stemming from the proposed 
rule and its preamble. NTIA has carefully considered each of the 
comments submitted. It has grouped and summarized the comments 
according to common themes and has responded accordingly. All written 
comments can be found at https://www.regulations.gov/document?D=NTIA-2016-0001-0001.

A. Standard of NTIA Fee Review and Approval

    Comment 1: A majority of commenters agreed that NTIA's fee review 
and approval should be scoped to determine whether the amount of 
FirstNet's fees, in aggregate and in combination with any FirstNet non-
fee-based income, is sufficient to cover, but does not exceed the 
amount necessary for, FirstNet's execution of its statutory duties. 
However, one commenter asserted that the Act is not explicit on NTIA's 
standard of review and offers no guidance to NTIA that its fee review 
and approval process should further FirstNet's self-sustainability 
requirements. Thus, the commenter asserted, NTIA's fee review should 
include review and approval of each individual fee FirstNet proposes to 
assess and collect.
    Response: Congress did not direct NTIA to review each individual 
fee FirstNet proposes to assess and collect. The Act mandates that 
``[t]he total amount of the fees assessed for each fiscal year . . . 
shall be sufficient, and shall not exceed the amount necessary, to 
recoup the total expenses of [FirstNet] in carrying out its duties and 
responsibilities [under the Act] for the fiscal year involved,'' \7\ 
and that NTIA review these fees annually.\8\ Thus, NTIA interprets the 
fee review requirement to compel an annual review of the aggregate fees 
assessed by FirstNet and determine whether these fees in toto are 
appropriate to enable FirstNet to recoup its expenses and be self-
sustaining. This interpretation corresponds to the Act's goal of 
creating ``permanent self-funding.'' \9\
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    \7\ 47 U.S.C. 1428(b).
    \8\ See 47 U.S.C. 1428(c) (``NTIA shall review the fees assessed 
under this section on an annual basis, and such fees may only be 
assessed if approved by the NTIA.'').
    \9\ 47 U.S.C. 1428.
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B. Reasonableness of a Proposed Fee

    Comment 1: While several commenters contend Congress did not 
require NTIA to conduct a review of the reasonableness of fees proposed 
by FirstNet, others disagree. One commenter suggests that NTIA misreads 
the statute in not finding a statutory requirement for a reasonableness 
review of each fee given the Act's goal of providing broadband service 
to first responders. Other commenters assert, as a matter of policy, 
that NTIA should seek state input or otherwise make determinations 
about the reasonableness of the fees FirstNet proposes to assess and 
collect.
    Response: Congress did not mandate that NTIA engage in a 
reasonableness review of each fee FirstNet proposes to assess and 
collect.\10\ To ensure that the fees that FirstNet assesses are 
reasonable and not excessive, as noted above, the Act mandates that 
``[t]he total amount of the fees assessed for each fiscal year . . . 
shall be sufficient, and shall not exceed the amount necessary, to 
recoup the total expenses of [FirstNet] in carrying out its duties and 
responsibilities [under the Act] for the fiscal year involved.'' \11\ 
This requirement therefore sets the boundaries of what constitutes 
reasonable fees for FirstNet to assess and collect. Thus, consistent 
with NTIA's fee review and approval scope, NTIA will approve FirstNet's 
fees as reasonable only if FirstNet's fees, in aggregate and in 
combination with any FirstNet non-fee-based income, are sufficient to 
cover, but do not exceed the amount necessary for, FirstNet's execution 
of its statutory duties for each fiscal year.
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    \10\ See 47 U.S.C. 1428(c).
    \11\ 47 U.S.C. 1428(b).
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    Comment 2: One commenter claimed that NTIA should expand its fee 
review to control the activity of FirstNet's Network partner and 
discourage any possible anticompetitive activity associated with access 
to spectrum licensed to FirstNet.
    Response: The Act does not require NTIA to regulate spectrum use; 
rather, the Act assigns decisions on the lawful use of FirstNet's 
spectrum resources to FirstNet. Thus, NTIA's fee review will assess 
whether the Act's self-sustainability goals are being achieved--not how 
FirstNet uses its licensed spectrum.

C. Focus of NTIA Fee Review Methodology

    Comment 1: Commenters generally agreed with NTIA's method of 
reviewing FirstNet's proposed fees. One party sought clarification on 
what total expenses and costs would be included in NTIA's assessment of 
whether FirstNet's fees and non-fee-based income meet but do not exceed 
its total expenses.
    Response: While such expenses and costs were outlined in the 
preamble of the proposed rule, NTIA agrees that defining the term 
``expenses'' in the rule will provide clarity for FirstNet and other 
stakeholders. For this reason, NTIA has amended the rule to include a 
definition of ``expenses'' as the term is discussed in the proposed 
rule

[[Page 40960]]

preamble.\12\ As stated in the final rule below, non-fee-based income 
received by FirstNet means, for purposes of this rule, FirstNet's 
receipt of money from any source, transaction, entity, or any other 
means allowed under 47 U.S.C. 1401 et seq., other than those receipts 
described in the definition of ``fee.''
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    \12\ Further, because the proposed rule preamble, fee review 
methodology, proposed and final rule, and new definition of 
``expenses'' all utilize the term ``standard financial 
documentation,'' NTIA has provided a definition of this term in the 
final rule consistent with the proposed rule preamble to provide 
further clarity to stakeholders.
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    Comment 2: Commenters generally agreed that NTIA should defer to 
FirstNet on any need for reserves, working capital, or similar fund 
categories. One commenter sought a definition of the term ``necessary 
reserves'' for purposes of NTIA's fee review and approval process.
    Response: NTIA agrees that defining the scope of necessary reserve 
funds on which it will defer to FirstNet provides further clarity on 
NTIA's fee review methodology. Accordingly, NTIA has included in the 
final rule a definition of ``necessary reserve funds.'' \13\ Necessary 
reserve funds means, for purposes of this rule, any amount of money 
identified by FirstNet in its standard financial documentation to meet 
expected and unexpected future expenses that may arise in the course of 
FirstNet executing its statutory powers, duties, and responsibilities 
under 47 U.S.C. 1401 et seq., including but not limited to capital 
reserve funds, operating reserve funds, maintenance reserve funds, and 
improvement reserve funds.
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    \13\ This definition reflects the term's use in the proposed 
rule preamble.
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    Comment 3: One commenter proposed that, if NTIA disapproves 
FirstNet's fee proposal, it should clearly articulate the reasons for 
such rejection.
    Response: NTIA agrees that providing guidance on reasons for any 
disapproval of FirstNet's proposed fees will assist FirstNet in 
providing revised fee proposals that may be approved. As with the 
proposed rule, the final rule requires written notification of NTIA's 
determination on FirstNet's proposed fees, and NTIA anticipates 
providing relevant details justifying its decision in that written 
communication.
    Comment 4: One commenter proposed that NTIA establish a timeline 
during which FirstNet must provide its proposed fees and NTIA must 
review and finalize a determination on FirstNet's proposal.
    Response: NTIA agrees that providing a detailed timeline for NTIA's 
fee review and approval process will offer certainty to potential users 
of the Network, FirstNet, and its Network partner. Accordingly, NTIA 
has revised its final rule to include such a timeline for NTIA's fee 
review process. As stated in the final rule, NTIA will abide by the Fee 
Review Schedule as set out in Sec.  500.5(g)(1) through (5).
    Comment 5: One commenter proposed that NTIA should address the 
possibility that FirstNet's fees may not be approved by the start of 
the new fiscal year. The commenter proposed that, should FirstNet's 
fees not be approved by the first day of the fiscal year, FirstNet may 
operate under the prior year's fees until fees for the next fiscal year 
are approved.
    Response: NTIA agrees that providing contingency procedures in the 
event that NTIA disapproves FirstNet's proposed fees for a given fiscal 
year may provide continuation of funding sources for the Network while 
FirstNet revises its fees. Accordingly, NTIA adds a provision to its 
final rule stating that, should NTIA disapprove FirstNet's proposed 
fees, fees approved by NTIA for the prior fiscal year may be assessed 
by FirstNet during the instant fiscal year until such time that NTIA 
approves FirstNet's proposed fees for the instant fiscal year.

D. Fees Subject to NTIA Review and FirstNet Reconsideration Upon NTIA 
Disapproval

    Comment 1: Commenters generally agreed that NTIA is authorized 
under the Act to only consider the three types of fees authorized under 
47 U.S.C. 1428(a). Two commenters sought further review on this when 
there is more clarity regarding the specific types of revenue FirstNet 
will collect, especially with regard to the specific fee structure 
established with FirstNet's Network partner.
    Response: During FirstNet's public procurement process, NTIA and 
stakeholders had sufficient clarity of FirstNet's planned approach to 
evaluate and shape NTIA's proposed fee review process.\14\ Accordingly, 
NTIA determines that its rule includes all provisions necessary to 
execute its statutory duties and does not at this time anticipate a 
need to revise its rule.
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    \14\ For example, Section L.3.3.3 of FirstNet's Request for 
Proposals for the deployment of the Network (RFP) required a 
schedule for nationwide payments to FirstNet. Such payment from 
FirstNet's Network partner, to be made annually, constitute fees 
identified in 47 U.S.C. 1428(a)(2). See FirstNet Nationwide Public 
Safety Broadband Network (NPSBN); Request for Proposals, 
Solicitation Number: D15PS00295E, Department of the Interior (Jan. 
13, 2016).
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E. Income Other Than Fees Is Not Subject to NTIA Fee Review

    Comment 1: Commenters sought clarity on whether NTIA would review 
any charges imposed or income collected by FirstNet or any other party 
beyond those specific fees authorized under 47 U.S.C. 1428(a). One 
commenter urged NTIA to review and approve fees charged by FirstNet's 
Network partner.
    Response: As indicated in the proposed rule, income received by 
FirstNet other than from fees authorized under 47 U.S.C. 1428(a) is not 
directly subject to NTIA review under 47 U.S.C. 1428(b) and (c). NTIA 
has included language further clarifying this determination in the 
final rule.
    However, NTIA will consider such non-fee-based income of FirstNet 
as part of its overall determination of whether the total of the fees 
defined in 47 U.S.C. 1428(a), together with such additional income, 
will be sufficient to recoup FirstNet's total expenses, but not exceed 
the amount necessary to carry out its statutory powers, duties, and 
responsibilities under the Act for the fiscal year involved.

F. Comment Outside the Scope of Rule

    Comment 1: One commenter requested that NTIA, in developing 
requirements for the review of a state's demonstration of the cost 
effectiveness of its state alternative plan to operate the RAN within 
that state pursuant to 47 U.S.C. 1442(e)(3)(D)(ii), restrict its 
assessment to whether the applicant state has sufficient funds to 
maintain the state's RAN.
    Response: NTIA has issued a Notice and Request for Comment on its 
duties with regard to 47 U.S.C. 1442(e)(3)(D) and invites parties to 
review that Notice and any further Notices in that proceeding.\15\
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    \15\ See State Alternative Plan Program (SAPP) and the First 
Responder Network Authority Nationwide Public Safety Broadband 
Network, Notice and Request for Comments, Docket Number: 160706588-
6588-01 (81 FR 46907, Jul. 19, 2016).
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III. Changes From the Proposed Rule

    In response to comments, NTIA included definitions of the terms 
``expenses,'' ``standard financial documentation,'' and ``necessary 
reserves.'' NTIA clarifies that user fees associated with state use of 
elements of the core network, referenced in 47 U.S.C. 1442(f), are user 
fees authorized by 47 U.S.C. 1428(a) and subject to NTIA review. NTIA 
affirms its fee review scope in the context of non-fee-based income as 
that term is defined in the rule. NTIA also provides

[[Page 40961]]

contingency provisions in the event NTIA disapproves FirstNet proposed 
fees and sets a timeline during which FirstNet and NTIA will propose 
and review fees pursuant to 47 U.S.C. 1428. Finally, NTIA makes minor 
clarifying edits in conformance with the Act.

IV. Classification

    The Director of Administration and Chief Financial Officer of the 
National Telecommunications and Information Administration, who is 
performing the non-exclusive duties of the Assistant Secretary for 
Communications and Information, has determined that this final rule is 
consistent with the Act and other applicable law.
    The need to implement these measures in a timely manner constitutes 
good cause under authority contained in 5 U.S.C. 553(d)(3) to waive the 
30-day waiting period and make the rule effective immediately upon 
publication in the Federal Register. It would be impractical to have to 
wait 30 days before the rule is effective because FirstNet requires the 
ability to assess and collect fees in order to ensure the deployment 
and operation of the Network, which will benefit first responders and 
the public at large. In addition, this final rule does not impose any 
requirements or obligations on members of the public.
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    It has been determined that the final rule is not major under 5 
U.S.C. 801 et seq.
    The Chief Counsel for Regulations for the Department of Commerce 
certified at the proposed rule stage that this rule does not have a 
significant economic impact on a substantial number of small entities. 
NTIA did not receive any comments on the certification, and the 
underlying analysis for the certification has not changed since the 
publication of the proposed rule.

    Dated: August 23, 2017.
Leonard Bechtel,
Chief Financial Officer and Director of Administration, performing the 
non-exclusive duties of the Assistant Secretary for Communications and 
Information, National Telecommunications and Information 
Administration.

List of Subjects in 47 CFR Part 500

    Broadband, Fees, First Responder Network Authority, National 
Telecommunications and Information Administration, Safety, 
Telecommunications.


0
For the reasons set out in the preamble, the National 
Telecommunications and Information Administration adds 47 CFR chapter V 
to read as follows:

47 CFR Chapter V--The First Responder Network Authority (Parts 500-599)

Subchapter A--National Telecommunications and Information 
Administration Regulations (Parts 500-549)

PART 500--REVIEW AND APPROVAL OF FEES PROPOSED BY THE FIRST 
RESPONDER NETWORK AUTHORITY (FIRSTNET) PARTS 501-549 [RESERVED]

Subchapter B--(Parts 550-599) [Reserved]

Subchapter A--National Telecommunications and Information 
Administration Regulations (Parts 500-549)

PART 500--REVIEW AND APPROVAL OF FEES PROPOSED BY THE FIRST 
RESPONDER NETWORK AUTHORITY (FIRSTNET)

Sec.
500.1 Purpose and scope.
500.2 General definitions.
500.3 NTIA duty to review FirstNet proposed fees.
500.4 Scope of NTIA review of FirstNet proposed fees.
500.5 Methodology of NTIA fee review and approval process.

    Authority: 47 U.S.C. 1401.


Sec.  500.1  Purpose and scope.

    Sections 500.2 through 500.5 of this part implement 47 U.S.C. 
1428(c) as codified pursuant to the Middle Class Tax Relief and Job 
Creation Act of 2012 (Pub. L. 112-96, Title VI, 126 Stat. 256 (codified 
at 47 U.S.C. 1401 et seq.)) (Act), which requires the National 
Telecommunications and Information Administration (NTIA) to annually 
review fees the First Responder Network Authority (FirstNet) proposes 
to assess pursuant to 47 U.S.C. 1428(a).


Sec.  500.2  General definitions.

    Expenses means incursions of costs by FirstNet in the course of 
executing its statutory powers, duties, and responsibilities under 47 
U.S.C. 1401 et seq., including but not limited to:
    (1) Salaries and Benefits;
    (2) Travel;
    (3) Services: Federal Sources;
    (4) Services: Non-Federal Sources;
    (5) Facilities Rental;
    (6) Supplies, Materials, and Printing;
    (7) Equipment; and
    (8) Other Expenses incurred for future contract award, necessary 
reserve funds, including for all other permitted purposes under the 
Act, or other authorized expenses as identified in FirstNet's standard 
financial documentation.
    Fee means:
    (1) FirstNet's receipt of money from:
    (i) Network User Fees, including User Fees Associated with State 
Use of Elements of the Core Network;
    (ii) Lease Fees Related To Network Capacity; or
    (iii) Lease Fees Related To Network Equipment And Infrastructure, 
as those terms are defined under 47 U.S.C. 1428(a) and 47 U.S.C. 
1442(f).
    (2) Income received by FirstNet other than from fees authorized 
under 47 U.S.C. 1428(a) is not directly subject to NTIA review. 
However, NTIA will consider such non-fee-based income as part of its 
determination of whether such income, when combined in aggregate with 
the fees authorized under 47 U.S.C. 1428(a), will be sufficient to 
recoup FirstNet's total expenses, but not exceed the amount necessary 
to carry out its statutory powers, duties, and responsibilities under 
47 U.S.C. 1401 et seq. for the fiscal year involved.
    FirstNet means the First Responder Network Authority.
    Fiscal Year means the 12-month accounting period for the federal 
government, which begins on October 1 of a given year and ends on 
September 30 of the subsequent year.
    Necessary reserve funds means any amount of money identified by 
FirstNet in its standard financial documentation to meet expected and 
unexpected future expenses that may arise in the course of FirstNet 
executing its statutory powers, duties, and responsibilities under 47 
U.S.C. 1401 et seq., including but not limited to capital reserve 
funds, operating reserve funds, maintenance reserve funds, and 
improvement reserve funds.
    Non-fee-based income received by FirstNet means FirstNet's receipt 
of money from any source, transaction, entity, or any other means 
allowed under 47 U.S.C. 1401 et seq., other than those receipts 
described above in the definition of ``fee.''
    NTIA means the National Telecommunications and Information 
Administration.
    NTIA's fee review and approval process means the process by which 
NTIA executes its duties under 47 U.S.C. 1428(c).
    Standard financial documentation means documents developed by 
FirstNet in its ordinary course of business that detail FirstNet's 
current and projected financial condition, which may include but is not 
limited to:
    (1) FirstNet's budget documents produced in the normal course of 
its business;

[[Page 40962]]

    (2) FirstNet's financial statements produced in the normal course 
of its business;
    (3) FirstNet's annual financial audit documents, which detail 
FirstNet's revenue categories and statutory authority for such 
categories;
    (4) FirstNet's annual budget reports submitted as part of the 
President's Budget; and
    (5) FirstNet's annual report to Congress.


Sec.  500.3  NTIA duty to review FirstNet proposed fees.

    As required under 47 U.S.C. 1428(c), NTIA shall exclusively review 
fees, which must be proposed by FirstNet in writing, through NTIA's 
review and approval process conducted on an annual basis.


Sec.  500.4  Scope of NTIA review of FirstNet proposed fees.

    NTIA shall approve FirstNet proposed fees only if such fees, when 
combined with any non-fee-based income projected to be received by 
FirstNet, are sufficient, but do not exceed the amount necessary, to 
recoup FirstNet's projected total expenses in carrying out its powers, 
duties, and responsibilities under 47 U.S.C. 1401 et seq. for the 
fiscal year involved.


Sec.  500.5  Methodology of NTIA fee review and approval process.

    (a) Fee review approach. To execute NTIA's fee review and approval 
process, NTIA shall utilize FirstNet's submission and FirstNet's 
standard financial documentation.
    (b) Deference to FirstNet on necessary reserve funds. In executing 
NTIA's fee review and approval process, NTIA shall defer to FirstNet 
with respect to its designated amount, use, and retention of necessary 
reserve funds. NTIA shall consider any such designated funds to be a 
part of FirstNet's total expenses in carrying out its powers, duties, 
and responsibilities under 47 U.S.C. 1401 et seq. for the fiscal year 
involved.
    (c) Determination of fee review. (1) NTIA shall make one of the 
following determinations annually upon review of FirstNet's proposed 
fees:
    (i) FirstNet's proposed fees, in aggregate, when combined with any 
projected non-fee-based income to be received by FirstNet, meet but do 
not exceed FirstNet's projected total expenses;
    (ii) FirstNet's proposed fees, in aggregate, when combined with any 
projected non-fee-based income to be received by FirstNet, do not meet 
FirstNet's projected total expenses; or
    (iii) FirstNet's proposed fees, in aggregate, when combined with 
any projected non-fee-based income to be received by FirstNet, exceed 
FirstNet's projected total expenses.
    (2) Upon making any of the determinations in paragraphs (c)(1)(i) 
through (iii) of this section, NTIA will communicate its determination 
in writing to the Chair of the FirstNet Board and the FirstNet Chief 
Executive Officer.
    (d) Outcome of determination of fee review. (1) Should NTIA make 
the determination listed in paragraph (c)(1) of this section, FirstNet 
may assess the proposed fees.
    (2) Should NTIA make one of the determinations listed in paragraph 
(c)(2) or (3) of this section, NTIA will disapprove FirstNet's proposed 
fees, and FirstNet may not assess those proposed fees.
    (e) Revision of proposed fees. Upon a disapproval of FirstNet's 
proposed fees as described in paragraph (d)(2) of this section, or upon 
FirstNet's determination that it must revise NTIA-approved fees to 
ensure compliance with 47 U.S.C. 1428(b), FirstNet shall prepare a 
revised written submission to NTIA, which shall evaluate any proposed 
fees therein consistent with the requirements in Sec. Sec.  500.1 
through 500.5. Should NTIA disapprove of FirstNet's proposed fees 
pursuant to this section, fees approved by NTIA for the prior fiscal 
year may be assessed by FirstNet during the instant fiscal year until 
such time that NTIA approves FirstNet's proposed fees for the instant 
fiscal year pursuant to paragraph (g) of this section.
    (f) Communication of NTIA fee approval or disapproval. Approval or 
disapproval of FirstNet-proposed fees shall be communicated in writing 
by the Assistant Secretary for Communications and Information and 
Administrator, National Telecommunications and Information 
Administration, U.S. Department of Commerce, to the Chair of the 
FirstNet Board and FirstNet Chief Executive Officer.
    (g) Process and timing of NTIA fee review. For each fiscal year, 
FirstNet and NTIA will abide by the following Fee Review Schedule:
    (1) Prior to assessing fees for a given fiscal year, FirstNet shall 
submit to NTIA its proposed fees for that given fiscal year and all 
standard financial documentation that will support its fee projections 
pursuant to this part.
    (2) No later than 15 days after FirstNet submits items under 
paragraph (g)(1) of this section, NTIA shall either notify FirstNet of 
its approval of the FirstNet proposed fees in accordance with paragraph 
(d) of this section or submit any questions or requests for 
clarifications to FirstNet regarding the submission listed in paragraph 
(g)(1).
    (3) No later than 15 days after FirstNet receives questions or 
requests for clarification from NTIA under paragraph (g)(2) of this 
section, FirstNet shall submit responses to NTIA.
    (4) No later than 15 days after receiving responses from FirstNet 
under paragraph (g)(3) of this section, NTIA shall approve or 
disapprove FirstNet's proposed fees pursuant to paragraph (d) of this 
section.
    (5) Should NTIA disapprove FirstNet's proposed fees, FirstNet and 
NTIA will abide by the following Revised Fee Review Schedule until such 
time as NTIA approves the revised fees:
    (i) 15 days after disapproval: FirstNet shall submit revised 
proposed fees to NTIA pursuant to paragraph (e) of this section.
    (ii) 15 days after revised fees submission to NTIA: NTIA shall 
submit any questions or requests for clarifications to FirstNet 
regarding the submission listed in paragraph (g)(5)(i) of this section.
    (iii) 15 days after NTIA submits questions to FirstNet: FirstNet 
shall submit responses to the questions listed in paragraph (g)(5)(ii) 
of this section.
    (iv) 15 days after NTIA receives responses from FirstNet to NTIA 
questions, NTIA shall approve or disapprove FirstNet's revised proposed 
fees pursuant to paragraph (d) of this section.

PARTS 501-549--[RESERVED]

Subchapter B--(Parts 550-599) [Reserved]

[FR Doc. 2017-18221 Filed 8-28-17; 8:45 am]
BILLING CODE 3510-60-P



                                                40958             Federal Register / Vol. 82, No. 166 / Tuesday, August 29, 2017 / Rules and Regulations

                                                Administrative Procedure Act, 5 U.S.C.                  should have no effect on Federal or state             DEPARTMENT OF COMMERCE
                                                553 (APA). The APA provides an                          expenditures.
                                                exception to the notice and comment                                                                           National Telecommunications and
                                                procedures when an agency finds there                   V. Regulatory Flexibility Act                         Information Administration
                                                is good cause for dispensing with such                     The Administrator of General Services
                                                procedures on the basis that they are                                                                         47 CFR Chapter V
                                                                                                        certifies that this final rule will not have
                                                impracticable, unnecessary or contrary                  a significant economic impact on a                    [Docket No. 151209999–7323–02]
                                                to the public interest. We have
                                                                                                        substantial number of small business                  RIN 0660–AA30
                                                determined that under 5 U.S.C.
                                                                                                        entities. While some penalties may have
                                                553(b)(3)(B) good cause exists for
                                                                                                        an impact on small business entities, it              Scope of NTIA’s Authority Regarding
                                                dispensing with the notice of proposed
                                                rulemaking and public comment                           is the nature of the violation and not the            FirstNet Fees
                                                procedures for this rule. Specifically,                 size of the entity that will result in an
                                                                                                                                                              AGENCY:  National Telecommunications
                                                this rulemaking comports and is                         action by the agency, and the aggregate
                                                                                                                                                              and Information Administration, U.S.
                                                consistent with the statutory authority                 economic impact of this rulemaking on
                                                                                                                                                              Department of Commerce.
                                                set forth in the Debt Collection                        small business entities should be
                                                                                                                                                              ACTION: Final rule.
                                                Improvement Act of 1996, with no                        minimal, affecting only those few who
                                                issues of policy discretion. Accordingly,               have engaged in prohibited conduct in                 SUMMARY: Congress authorized the First
                                                we believe that opportunity for prior                   violation of statutory intent.                        Responder Network Authority
                                                comment is unnecessary and contrary to                  VI. Paperwork Reduction Act                           (FirstNet), an independent authority
                                                the public interest, and we are issuing                                                                       within the National
                                                these revised regulations as a final rule                 This final rule imposes no new                      Telecommunications and Information
                                                that will apply to all future cases under               reporting or recordkeeping requirements               Administration (NTIA), to assess and
                                                this authority.                                         necessitating clearance by OMB.                       collect, among other funds, three
                                                                                                                                                              specific types of fees. By law, NTIA
                                                IV. Executive Orders 12866 and 13563                    List of Subject in 41 CFR Part 105–70                 must review and approve these fees on
                                                   Executive Orders (E.O.s) 12866 and                                                                         an annual basis. This final rule
                                                                                                          Administrative hearing, Claims,
                                                13563 direct agencies to assess all costs                                                                     describes NTIA’s overarching scope,
                                                                                                        Program fraud.                                        boundaries, and guidelines for its
                                                and benefits of available regulatory
                                                alternatives and, if regulation is                        Dated: July 18, 2017.                               FirstNet fee review and approval
                                                necessary, to select regulatory                         Timothy Horne,                                        process as mandated by the Middle
                                                approaches that maximize net benefits                   Acting Administrator of General Services.             Class Tax Relief and Job Creation Act of
                                                (including potential economic,                                                                                2012 (the Act).
                                                environmental, public health and safety                   Accordingly, 41 CFR part 105–70 is                  DATES: Effective on August 29, 2017.
                                                effects, distributive impacts, and                      amended as set forth below:                           FOR FURTHER INFORMATION CONTACT:
                                                equity). E.O. 13563 emphasizes the                                                                            Patrick Sullivan; Office of Public Safety
                                                importance of quantifying both costs                    PART 105–70—IMPLEMENTATION OF
                                                                                                                                                              Communications; National
                                                and benefits, of reducing costs, of                     THE PROGRAM FRAUD CIVIL
                                                                                                                                                              Telecommunications and Information
                                                harmonizing rules, and of promoting                     REMEDIES ACT OF 1986                                  Administration; U.S. Department of
                                                flexibility. This is a not significant                                                                        Commerce; 1401 Constitution Avenue
                                                regulatory action and, therefore, was not               ■ 1. The authority citation for 41 CFR                NW., Washington, DC 20230;
                                                subject to review under Section 6(b) of                 part 105–70 continues to read as                      psullivan@ntia.doc.gov.
                                                E.O. 12866, Regulatory Planning and                     follows:                                              SUPPLEMENTARY INFORMATION:
                                                Review, dated September 30, 1993. This
                                                                                                          Authority: 40 U.S.C. 486(c); 31 U.S.C.
                                                rule is not a major rule under 5 U.S.C.                                                                       I. Background
                                                                                                        3809.
                                                804.                                                                                                            The Act established FirstNet as an
                                                   The Office of Management and Budget                  § 105–70.003      [Amended]                           independent authority within NTIA
                                                (OMB) has reviewed this final rule in                                                                         charged with ensuring the building,
                                                accordance with the provisions of E.O.                  ■  2. Amend § 105–70.003 by—
                                                                                                                                                              deployment, and operation of an
                                                12866 and has determined that it does                   ■  a. Removing from paragraph (a)(1)(iv)              interoperable nationwide public safety
                                                not meet the criteria for a significant                 the amount ‘‘5,500’’ and adding                       broadband network (Network).1 It also
                                                regulatory action. As indicated above,                  ‘‘10,781’’ in its place; and                          requires FirstNet to be self-sustainable.2
                                                the provisions contained in this final                  ■ b. Removing from paragraph (b)(1)(ii)               The Act authorizes FirstNet to, among
                                                rulemaking set forth the inflation                                                                            other actions, assess and collect the
                                                                                                        the amount ‘‘5,500’’ and adding
                                                adjustments in compliance with the                                                                            following specific fees: (1) Network user
                                                                                                        ‘‘10,781’’ in its place.
                                                Debt Collection Improvement Act of                                                                            fees, including user fees associated with
                                                1996 for specific applicable CMPs. The                  [FR Doc. 2017–18274 Filed 8–28–17; 8:45 am]
                                                                                                                                                              state use of elements of the core
                                                great majority of individuals,                          BILLING CODE 6820–81–P
                                                                                                                                                              network; (2) lease fees related to
                                                organizations and entities addressed                                                                          network capacity, pursuant to a covered
                                                through these regulations do not engage                                                                       leasing agreement; and (3) fees from
                                                in such prohibited conduct, and as a                                                                          entities seeking to access or use any
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                                                result, we believe that any aggregate                                                                         equipment or infrastructure constructed
                                                economic impact of these revised                                                                              or otherwise owned by FirstNet.3 It
                                                regulations will be minimal, affecting                                                                        requires the total amount of these fees,
                                                only those limited few who may engage
                                                in prohibited conduct in violation of the                                                                       1 See 47 U.S.C. 1426(a)–(b)(1).
                                                statute. As such, this final rule and the                                                                       2 See 47 U.S.C. 1428(b).
                                                inflation adjustment contained therein                                                                          3 See 47 U.S.C. 1428(a); 47 U.S.C. 1442(f).




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                                                                  Federal Register / Vol. 82, No. 166 / Tuesday, August 29, 2017 / Rules and Regulations                                         40959

                                                for each fiscal year, to be sufficient, but             A. Standard of NTIA Fee Review and                        Response: Congress did not mandate
                                                not to exceed, the amount necessary to                  Approval                                               that NTIA engage in a reasonableness
                                                recoup the total expenses of FirstNet as                                                                       review of each fee FirstNet proposes to
                                                                                                           Comment 1: A majority of                            assess and collect.10 To ensure that the
                                                it carries out its duties under the Act.4
                                                                                                        commenters agreed that NTIA’s fee                      fees that FirstNet assesses are reasonable
                                                FirstNet must reinvest amounts received                 review and approval should be scoped
                                                from the assessment of these fees for                                                                          and not excessive, as noted above, the
                                                                                                        to determine whether the amount of                     Act mandates that ‘‘[t]he total amount of
                                                constructing, maintaining, operating, or                FirstNet’s fees, in aggregate and in
                                                improving the Network.5 Finally, as an                                                                         the fees assessed for each fiscal year
                                                                                                        combination with any FirstNet non-fee-                 . . . shall be sufficient, and shall not
                                                element of NTIA’s oversight                             based income, is sufficient to cover, but
                                                responsibilities for FirstNet, NTIA must                                                                       exceed the amount necessary, to recoup
                                                                                                        does not exceed the amount necessary                   the total expenses of [FirstNet] in
                                                review these fees on an annual basis,                   for, FirstNet’s execution of its statutory
                                                and such fees may only be assessed if                                                                          carrying out its duties and
                                                                                                        duties. However, one commenter                         responsibilities [under the Act] for the
                                                approved by NTIA.6                                      asserted that the Act is not explicit on               fiscal year involved.’’ 11 This
                                                   This action: (1) Adopts the tenets of                NTIA’s standard of review and offers no                requirement therefore sets the
                                                the proposed rule; (2) finds that                       guidance to NTIA that its fee review and               boundaries of what constitutes
                                                Congress established a statutory                        approval process should further                        reasonable fees for FirstNet to assess
                                                framework for NTIA to use to determine                  FirstNet’s self-sustainability                         and collect. Thus, consistent with
                                                the reasonableness of FirstNet’s                        requirements. Thus, the commenter                      NTIA’s fee review and approval scope,
                                                proposed fees; (3) establishes the scope                asserted, NTIA’s fee review should                     NTIA will approve FirstNet’s fees as
                                                of NTIA’s fee review and approval                       include review and approval of each                    reasonable only if FirstNet’s fees, in
                                                                                                        individual fee FirstNet proposes to                    aggregate and in combination with any
                                                process in fulfillment of the Act’s
                                                                                                        assess and collect.                                    FirstNet non-fee-based income, are
                                                requirements that FirstNet be self-
                                                sustainable and invest back into the                       Response: Congress did not direct                   sufficient to cover, but do not exceed
                                                Network; (4) defines the fees subject to                NTIA to review each individual fee                     the amount necessary for, FirstNet’s
                                                NTIA review; and (5) details NTIA’s fee                 FirstNet proposes to assess and collect.               execution of its statutory duties for each
                                                                                                        The Act mandates that ‘‘[t]he total                    fiscal year.
                                                review and approval methodology,
                                                                                                        amount of the fees assessed for each
                                                timing, and process.                                                                                              Comment 2: One commenter claimed
                                                                                                        fiscal year . . . shall be sufficient, and
                                                   NTIA published a proposed rule for                                                                          that NTIA should expand its fee review
                                                                                                        shall not exceed the amount necessary,
                                                this action on December 15, 2015 (80 FR                                                                        to control the activity of FirstNet’s
                                                                                                        to recoup the total expenses of [FirstNet]
                                                77592). The preamble to the proposed                                                                           Network partner and discourage any
                                                                                                        in carrying out its duties and
                                                rule gives more background and                                                                                 possible anticompetitive activity
                                                                                                        responsibilities [under the Act] for the
                                                                                                                                                               associated with access to spectrum
                                                information on FirstNet’s and NTIA’s                    fiscal year involved,’’ 7 and that NTIA
                                                                                                                                                               licensed to FirstNet.
                                                respective duties with regard to the                    review these fees annually.8 Thus, NTIA
                                                Network and related fees and other                      interprets the fee review requirement to                  Response: The Act does not require
                                                income, and describes the scope and                     compel an annual review of the                         NTIA to regulate spectrum use; rather,
                                                method of NTIA’s fee review and                         aggregate fees assessed by FirstNet and                the Act assigns decisions on the lawful
                                                approval process, which are not                         determine whether these fees in toto are               use of FirstNet’s spectrum resources to
                                                repeated here.                                          appropriate to enable FirstNet to recoup               FirstNet. Thus, NTIA’s fee review will
                                                                                                        its expenses and be self-sustaining. This              assess whether the Act’s self-
                                                II. Response to Comments                                interpretation corresponds to the Act’s                sustainability goals are being achieved—
                                                                                                        goal of creating ‘‘permanent self-                     not how FirstNet uses its licensed
                                                   The comment period on the proposed                                                                          spectrum.
                                                                                                        funding.’’ 9
                                                rule ended on January 14, 2016. NTIA
                                                received eight comments: two from                       B. Reasonableness of a Proposed Fee                    C. Focus of NTIA Fee Review
                                                states, one from a local public safety                                                                         Methodology
                                                                                                          Comment 1: While several
                                                organization, one from a                                commenters contend Congress did not                       Comment 1: Commenters generally
                                                telecommunications service provider,                    require NTIA to conduct a review of the                agreed with NTIA’s method of
                                                and four from trade associations.                       reasonableness of fees proposed by                     reviewing FirstNet’s proposed fees. One
                                                Comments on the proposed rule                           FirstNet, others disagree. One                         party sought clarification on what total
                                                included several similar positions,                     commenter suggests that NTIA misreads                  expenses and costs would be included
                                                inquiries both within and outside the                   the statute in not finding a statutory                 in NTIA’s assessment of whether
                                                scope of the rule, and recommendations                  requirement for a reasonableness review                FirstNet’s fees and non-fee-based
                                                stemming from the proposed rule and                     of each fee given the Act’s goal of                    income meet but do not exceed its total
                                                its preamble. NTIA has carefully                        providing broadband service to first                   expenses.
                                                considered each of the comments                         responders. Other commenters assert, as                   Response: While such expenses and
                                                submitted. It has grouped and                           a matter of policy, that NTIA should                   costs were outlined in the preamble of
                                                summarized the comments according to                    seek state input or otherwise make                     the proposed rule, NTIA agrees that
                                                common themes and has responded                         determinations about the reasonableness                defining the term ‘‘expenses’’ in the rule
                                                accordingly. All written comments can                   of the fees FirstNet proposes to assess                will provide clarity for FirstNet and
jstallworth on DSKBBY8HB2PROD with RULES




                                                be found at https://                                    and collect.                                           other stakeholders. For this reason,
                                                www.regulations.gov/                                                                                           NTIA has amended the rule to include
                                                                                                          7 47 U.S.C. 1428(b).
                                                document?D=NTIA-2016-0001-0001.                                                                                a definition of ‘‘expenses’’ as the term
                                                                                                          8 See 47 U.S.C. 1428(c) (‘‘NTIA shall review the     is discussed in the proposed rule
                                                                                                        fees assessed under this section on an annual basis,
                                                  4 See 47 U.S.C. 1428(b).                              and such fees may only be assessed if approved by
                                                  5 See 47 U.S.C. 1428(d).                              the NTIA.’’).                                           10 See   47 U.S.C. 1428(c).
                                                  6 See 47 U.S.C. 1428(c).                                9 47 U.S.C. 1428.                                     11 47   U.S.C. 1428(b).



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                                                40960             Federal Register / Vol. 82, No. 166 / Tuesday, August 29, 2017 / Rules and Regulations

                                                preamble.12 As stated in the final rule                 certainty to potential users of the                     E. Income Other Than Fees Is Not
                                                below, non-fee-based income received                    Network, FirstNet, and its Network                      Subject to NTIA Fee Review
                                                by FirstNet means, for purposes of this                 partner. Accordingly, NTIA has revised                     Comment 1: Commenters sought
                                                rule, FirstNet’s receipt of money from                  its final rule to include such a timeline               clarity on whether NTIA would review
                                                any source, transaction, entity, or any                 for NTIA’s fee review process. As stated                any charges imposed or income
                                                other means allowed under 47 U.S.C.                     in the final rule, NTIA will abide by the               collected by FirstNet or any other party
                                                1401 et seq., other than those receipts                 Fee Review Schedule as set out in                       beyond those specific fees authorized
                                                described in the definition of ‘‘fee.’’                 § 500.5(g)(1) through (5).                              under 47 U.S.C. 1428(a). One
                                                   Comment 2: Commenters generally                         Comment 5: One commenter                             commenter urged NTIA to review and
                                                agreed that NTIA should defer to                        proposed that NTIA should address the                   approve fees charged by FirstNet’s
                                                FirstNet on any need for reserves,                      possibility that FirstNet’s fees may not                Network partner.
                                                working capital, or similar fund                        be approved by the start of the new                        Response: As indicated in the
                                                categories. One commenter sought a                      fiscal year. The commenter proposed                     proposed rule, income received by
                                                definition of the term ‘‘necessary                      that, should FirstNet’s fees not be                     FirstNet other than from fees authorized
                                                reserves’’ for purposes of NTIA’s fee                   approved by the first day of the fiscal                 under 47 U.S.C. 1428(a) is not directly
                                                review and approval process.                            year, FirstNet may operate under the                    subject to NTIA review under 47 U.S.C.
                                                   Response: NTIA agrees that defining                  prior year’s fees until fees for the next               1428(b) and (c). NTIA has included
                                                the scope of necessary reserve funds on                 fiscal year are approved.                               language further clarifying this
                                                which it will defer to FirstNet provides                                                                        determination in the final rule.
                                                further clarity on NTIA’s fee review                       Response: NTIA agrees that providing
                                                                                                        contingency procedures in the event                        However, NTIA will consider such
                                                methodology. Accordingly, NTIA has                                                                              non-fee-based income of FirstNet as part
                                                included in the final rule a definition of              that NTIA disapproves FirstNet’s
                                                                                                        proposed fees for a given fiscal year may               of its overall determination of whether
                                                ‘‘necessary reserve funds.’’ 13 Necessary                                                                       the total of the fees defined in 47 U.S.C.
                                                reserve funds means, for purposes of                    provide continuation of funding sources
                                                                                                        for the Network while FirstNet revises                  1428(a), together with such additional
                                                this rule, any amount of money                                                                                  income, will be sufficient to recoup
                                                identified by FirstNet in its standard                  its fees. Accordingly, NTIA adds a
                                                                                                        provision to its final rule stating that,               FirstNet’s total expenses, but not exceed
                                                financial documentation to meet                                                                                 the amount necessary to carry out its
                                                expected and unexpected future                          should NTIA disapprove FirstNet’s
                                                                                                        proposed fees, fees approved by NTIA                    statutory powers, duties, and
                                                expenses that may arise in the course of                                                                        responsibilities under the Act for the
                                                FirstNet executing its statutory powers,                for the prior fiscal year may be assessed
                                                                                                        by FirstNet during the instant fiscal year              fiscal year involved.
                                                duties, and responsibilities under 47
                                                U.S.C. 1401 et seq., including but not                  until such time that NTIA approves                      F. Comment Outside the Scope of Rule
                                                limited to capital reserve funds,                       FirstNet’s proposed fees for the instant
                                                                                                        fiscal year.                                              Comment 1: One commenter
                                                operating reserve funds, maintenance                                                                            requested that NTIA, in developing
                                                reserve funds, and improvement reserve                  D. Fees Subject to NTIA Review and                      requirements for the review of a state’s
                                                funds.                                                  FirstNet Reconsideration Upon NTIA                      demonstration of the cost effectiveness
                                                   Comment 3: One commenter                             Disapproval                                             of its state alternative plan to operate
                                                proposed that, if NTIA disapproves                                                                              the RAN within that state pursuant to 47
                                                FirstNet’s fee proposal, it should clearly                Comment 1: Commenters generally
                                                                                                                                                                U.S.C. 1442(e)(3)(D)(ii), restrict its
                                                articulate the reasons for such rejection.              agreed that NTIA is authorized under
                                                                                                                                                                assessment to whether the applicant
                                                   Response: NTIA agrees that providing                 the Act to only consider the three types
                                                                                                                                                                state has sufficient funds to maintain
                                                guidance on reasons for any disapproval                 of fees authorized under 47 U.S.C.
                                                                                                                                                                the state’s RAN.
                                                of FirstNet’s proposed fees will assist                 1428(a). Two commenters sought further
                                                                                                                                                                  Response: NTIA has issued a Notice
                                                FirstNet in providing revised fee                       review on this when there is more
                                                                                                                                                                and Request for Comment on its duties
                                                proposals that may be approved. As                      clarity regarding the specific types of
                                                                                                                                                                with regard to 47 U.S.C. 1442(e)(3)(D)
                                                with the proposed rule, the final rule                  revenue FirstNet will collect, especially
                                                                                                                                                                and invites parties to review that Notice
                                                requires written notification of NTIA’s                 with regard to the specific fee structure
                                                                                                                                                                and any further Notices in that
                                                determination on FirstNet’s proposed                    established with FirstNet’s Network
                                                                                                                                                                proceeding.15
                                                fees, and NTIA anticipates providing                    partner.
                                                relevant details justifying its decision in               Response: During FirstNet’s public                    III. Changes From the Proposed Rule
                                                that written communication.                             procurement process, NTIA and                              In response to comments, NTIA
                                                   Comment 4: One commenter                             stakeholders had sufficient clarity of                  included definitions of the terms
                                                proposed that NTIA establish a timeline                 FirstNet’s planned approach to evaluate                 ‘‘expenses,’’ ‘‘standard financial
                                                during which FirstNet must provide its                  and shape NTIA’s proposed fee review                    documentation,’’ and ‘‘necessary
                                                proposed fees and NTIA must review                      process.14 Accordingly, NTIA                            reserves.’’ NTIA clarifies that user fees
                                                and finalize a determination on                         determines that its rule includes all                   associated with state use of elements of
                                                FirstNet’s proposal.                                    provisions necessary to execute its                     the core network, referenced in 47
                                                   Response: NTIA agrees that providing                 statutory duties and does not at this                   U.S.C. 1442(f), are user fees authorized
                                                a detailed timeline for NTIA’s fee                      time anticipate a need to revise its rule.              by 47 U.S.C. 1428(a) and subject to
                                                review and approval process will offer                                                                          NTIA review. NTIA affirms its fee
                                                                                                           14 For example, Section L.3.3.3 of FirstNet’s
                                                                                                                                                                review scope in the context of non-fee-
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                                                  12 Further, because the proposed rule preamble,       Request for Proposals for the deployment of the         based income as that term is defined in
                                                fee review methodology, proposed and final rule,        Network (RFP) required a schedule for nationwide
                                                and new definition of ‘‘expenses’’ all utilize the      payments to FirstNet. Such payment from FirstNet’s      the rule. NTIA also provides
                                                term ‘‘standard financial documentation,’’ NTIA has     Network partner, to be made annually, constitute
                                                provided a definition of this term in the final rule    fees identified in 47 U.S.C. 1428(a)(2). See FirstNet     15 See State Alternative Plan Program (SAPP) and
                                                consistent with the proposed rule preamble to           Nationwide Public Safety Broadband Network              the First Responder Network Authority Nationwide
                                                provide further clarity to stakeholders.                (NPSBN); Request for Proposals, Solicitation            Public Safety Broadband Network, Notice and
                                                  13 This definition reflects the term’s use in the     Number: D15PS00295E, Department of the Interior         Request for Comments, Docket Number:
                                                proposed rule preamble.                                 (Jan. 13, 2016).                                        160706588–6588–01 (81 FR 46907, Jul. 19, 2016).



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                                                                  Federal Register / Vol. 82, No. 166 / Tuesday, August 29, 2017 / Rules and Regulations                                       40961

                                                contingency provisions in the event                     Telecommunications and Information                    FirstNet’s standard financial
                                                NTIA disapproves FirstNet proposed                      Administration adds 47 CFR chapter V                  documentation.
                                                fees and sets a timeline during which                   to read as follows:                                     Fee means:
                                                FirstNet and NTIA will propose and                                                                              (1) FirstNet’s receipt of money from:
                                                                                                        47 CFR Chapter V—The First Responder
                                                review fees pursuant to 47 U.S.C. 1428.                                                                         (i) Network User Fees, including User
                                                                                                        Network Authority (Parts 500–599)
                                                Finally, NTIA makes minor clarifying                                                                          Fees Associated with State Use of
                                                edits in conformance with the Act.                      Subchapter A—National                                 Elements of the Core Network;
                                                                                                        Telecommunications and Information                      (ii) Lease Fees Related To Network
                                                IV. Classification                                      Administration Regulations (Parts 500–549)            Capacity; or
                                                   The Director of Administration and                                                                           (iii) Lease Fees Related To Network
                                                                                                        PART 500—REVIEW AND APPROVAL                          Equipment And Infrastructure, as those
                                                Chief Financial Officer of the National                 OF FEES PROPOSED BY THE FIRST
                                                Telecommunications and Information                                                                            terms are defined under 47 U.S.C.
                                                                                                        RESPONDER NETWORK AUTHORITY                           1428(a) and 47 U.S.C. 1442(f).
                                                Administration, who is performing the                   (FIRSTNET) PARTS 501–549
                                                non-exclusive duties of the Assistant                                                                           (2) Income received by FirstNet other
                                                                                                        [RESERVED]                                            than from fees authorized under 47
                                                Secretary for Communications and
                                                Information, has determined that this                   Subchapter B—(Parts 550–599) [Reserved]               U.S.C. 1428(a) is not directly subject to
                                                final rule is consistent with the Act and                                                                     NTIA review. However, NTIA will
                                                other applicable law.                                   Subchapter A—National                                 consider such non-fee-based income as
                                                   The need to implement these                          Telecommunications and Information                    part of its determination of whether
                                                measures in a timely manner constitutes                 Administration Regulations (Parts 500–                such income, when combined in
                                                good cause under authority contained in                 549)                                                  aggregate with the fees authorized under
                                                5 U.S.C. 553(d)(3) to waive the 30-day                                                                        47 U.S.C. 1428(a), will be sufficient to
                                                waiting period and make the rule                        PART 500—REVIEW AND APPROVAL                          recoup FirstNet’s total expenses, but not
                                                effective immediately upon publication                  OF FEES PROPOSED BY THE FIRST                         exceed the amount necessary to carry
                                                in the Federal Register. It would be                    RESPONDER NETWORK AUTHORITY                           out its statutory powers, duties, and
                                                impractical to have to wait 30 days                     (FIRSTNET)                                            responsibilities under 47 U.S.C. 1401 et
                                                before the rule is effective because                                                                          seq. for the fiscal year involved.
                                                                                                        Sec.
                                                FirstNet requires the ability to assess                 500.1 Purpose and scope.
                                                                                                                                                                FirstNet means the First Responder
                                                and collect fees in order to ensure the                 500.2 General definitions.                            Network Authority.
                                                deployment and operation of the                         500.3 NTIA duty to review FirstNet                      Fiscal Year means the 12-month
                                                Network, which will benefit first                            proposed fees.                                   accounting period for the federal
                                                responders and the public at large. In                  500.4 Scope of NTIA review of FirstNet                government, which begins on October 1
                                                addition, this final rule does not impose                    proposed fees.                                   of a given year and ends on September
                                                                                                        500.5 Methodology of NTIA fee review and              30 of the subsequent year.
                                                any requirements or obligations on                           approval process.
                                                members of the public.                                                                                          Necessary reserve funds means any
                                                   This final rule has been determined to                 Authority: 47 U.S.C. 1401.                          amount of money identified by FirstNet
                                                be not significant for purposes of                                                                            in its standard financial documentation
                                                                                                        § 500.1   Purpose and scope.                          to meet expected and unexpected future
                                                Executive Order 12866.
                                                                                                          Sections 500.2 through 500.5 of this                expenses that may arise in the course of
                                                   It has been determined that the final
                                                                                                        part implement 47 U.S.C. 1428(c) as                   FirstNet executing its statutory powers,
                                                rule is not major under 5 U.S.C. 801 et
                                                                                                        codified pursuant to the Middle Class                 duties, and responsibilities under 47
                                                seq.
                                                                                                        Tax Relief and Job Creation Act of 2012               U.S.C. 1401 et seq., including but not
                                                   The Chief Counsel for Regulations for
                                                                                                        (Pub. L. 112–96, Title VI, 126 Stat. 256              limited to capital reserve funds,
                                                the Department of Commerce certified at
                                                                                                        (codified at 47 U.S.C. 1401 et seq.))                 operating reserve funds, maintenance
                                                the proposed rule stage that this rule
                                                                                                        (Act), which requires the National                    reserve funds, and improvement reserve
                                                does not have a significant economic
                                                                                                        Telecommunications and Information                    funds.
                                                impact on a substantial number of small
                                                                                                        Administration (NTIA) to annually                       Non-fee-based income received by
                                                entities. NTIA did not receive any
                                                                                                        review fees the First Responder Network               FirstNet means FirstNet’s receipt of
                                                comments on the certification, and the
                                                                                                        Authority (FirstNet) proposes to assess               money from any source, transaction,
                                                underlying analysis for the certification
                                                                                                        pursuant to 47 U.S.C. 1428(a).                        entity, or any other means allowed
                                                has not changed since the publication of
                                                                                                                                                              under 47 U.S.C. 1401 et seq., other than
                                                the proposed rule.                                      § 500.2   General definitions.                        those receipts described above in the
                                                  Dated: August 23, 2017.                                 Expenses means incursions of costs                  definition of ‘‘fee.’’
                                                Leonard Bechtel,                                        by FirstNet in the course of executing its              NTIA means the National
                                                Chief Financial Officer and Director of                 statutory powers, duties, and                         Telecommunications and Information
                                                Administration, performing the non-exclusive            responsibilities under 47 U.S.C. 1401 et              Administration.
                                                duties of the Assistant Secretary for                   seq., including but not limited to:                     NTIA’s fee review and approval
                                                Communications and Information, National                  (1) Salaries and Benefits;                          process means the process by which
                                                Telecommunications and Information                        (2) Travel;                                         NTIA executes its duties under 47
                                                Administration.                                           (3) Services: Federal Sources;                      U.S.C. 1428(c).
                                                List of Subjects in 47 CFR Part 500                       (4) Services: Non-Federal Sources;                    Standard financial documentation
                                                                                                          (5) Facilities Rental;                              means documents developed by
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                                                  Broadband, Fees, First Responder                        (6) Supplies, Materials, and Printing;              FirstNet in its ordinary course of
                                                Network Authority, National                               (7) Equipment; and                                  business that detail FirstNet’s current
                                                Telecommunications and Information                        (8) Other Expenses incurred for future              and projected financial condition,
                                                Administration, Safety,                                 contract award, necessary reserve funds,              which may include but is not limited to:
                                                Telecommunications.                                     including for all other permitted                       (1) FirstNet’s budget documents
                                                ■ For the reasons set out in the                        purposes under the Act, or other                      produced in the normal course of its
                                                preamble, the National                                  authorized expenses as identified in                  business;


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                                                40962             Federal Register / Vol. 82, No. 166 / Tuesday, August 29, 2017 / Rules and Regulations

                                                  (2) FirstNet’s financial statements                   exceed FirstNet’s projected total                        (g) Process and timing of NTIA fee
                                                produced in the normal course of its                    expenses;                                             review. For each fiscal year, FirstNet
                                                business;                                                  (ii) FirstNet’s proposed fees, in                  and NTIA will abide by the following
                                                  (3) FirstNet’s annual financial audit                 aggregate, when combined with any                     Fee Review Schedule:
                                                documents, which detail FirstNet’s                      projected non-fee-based income to be                     (1) Prior to assessing fees for a given
                                                revenue categories and statutory                        received by FirstNet, do not meet                     fiscal year, FirstNet shall submit to
                                                authority for such categories;                          FirstNet’s projected total expenses; or               NTIA its proposed fees for that given
                                                  (4) FirstNet’s annual budget reports                     (iii) FirstNet’s proposed fees, in                 fiscal year and all standard financial
                                                submitted as part of the President’s                    aggregate, when combined with any                     documentation that will support its fee
                                                Budget; and                                             projected non-fee-based income to be                  projections pursuant to this part.
                                                  (5) FirstNet’s annual report to                       received by FirstNet, exceed FirstNet’s                  (2) No later than 15 days after FirstNet
                                                Congress.                                               projected total expenses.                             submits items under paragraph (g)(1) of
                                                                                                           (2) Upon making any of the                         this section, NTIA shall either notify
                                                § 500.3 NTIA duty to review FirstNet                    determinations in paragraphs (c)(1)(i)                FirstNet of its approval of the FirstNet
                                                proposed fees.                                          through (iii) of this section, NTIA will              proposed fees in accordance with
                                                  As required under 47 U.S.C. 1428(c),                  communicate its determination in                      paragraph (d) of this section or submit
                                                NTIA shall exclusively review fees,                     writing to the Chair of the FirstNet                  any questions or requests for
                                                which must be proposed by FirstNet in                   Board and the FirstNet Chief Executive                clarifications to FirstNet regarding the
                                                writing, through NTIA’s review and                      Officer.                                              submission listed in paragraph (g)(1).
                                                approval process conducted on an                           (d) Outcome of determination of fee                   (3) No later than 15 days after FirstNet
                                                annual basis.                                           review. (1) Should NTIA make the                      receives questions or requests for
                                                                                                        determination listed in paragraph (c)(1)              clarification from NTIA under
                                                § 500.4 Scope of NTIA review of FirstNet                of this section, FirstNet may assess the              paragraph (g)(2) of this section, FirstNet
                                                proposed fees.                                          proposed fees.                                        shall submit responses to NTIA.
                                                   NTIA shall approve FirstNet proposed                    (2) Should NTIA make one of the                       (4) No later than 15 days after
                                                fees only if such fees, when combined                   determinations listed in paragraph (c)(2)             receiving responses from FirstNet under
                                                with any non-fee-based income                           or (3) of this section, NTIA will                     paragraph (g)(3) of this section, NTIA
                                                projected to be received by FirstNet, are               disapprove FirstNet’s proposed fees,                  shall approve or disapprove FirstNet’s
                                                sufficient, but do not exceed the amount                and FirstNet may not assess those                     proposed fees pursuant to paragraph (d)
                                                necessary, to recoup FirstNet’s projected               proposed fees.                                        of this section.
                                                total expenses in carrying out its                         (e) Revision of proposed fees. Upon a                 (5) Should NTIA disapprove
                                                powers, duties, and responsibilities                    disapproval of FirstNet’s proposed fees               FirstNet’s proposed fees, FirstNet and
                                                under 47 U.S.C. 1401 et seq. for the                    as described in paragraph (d)(2) of this              NTIA will abide by the following
                                                fiscal year involved.                                   section, or upon FirstNet’s                           Revised Fee Review Schedule until such
                                                                                                        determination that it must revise NTIA-               time as NTIA approves the revised fees:
                                                § 500.5 Methodology of NTIA fee review                  approved fees to ensure compliance
                                                and approval process.                                                                                            (i) 15 days after disapproval: FirstNet
                                                                                                        with 47 U.S.C. 1428(b), FirstNet shall                shall submit revised proposed fees to
                                                  (a) Fee review approach. To execute                   prepare a revised written submission to               NTIA pursuant to paragraph (e) of this
                                                NTIA’s fee review and approval process,                 NTIA, which shall evaluate any                        section.
                                                NTIA shall utilize FirstNet’s submission                proposed fees therein consistent with                    (ii) 15 days after revised fees
                                                and FirstNet’s standard financial                       the requirements in §§ 500.1 through                  submission to NTIA: NTIA shall submit
                                                documentation.                                          500.5. Should NTIA disapprove of                      any questions or requests for
                                                  (b) Deference to FirstNet on necessary                FirstNet’s proposed fees pursuant to this             clarifications to FirstNet regarding the
                                                reserve funds. In executing NTIA’s fee                  section, fees approved by NTIA for the                submission listed in paragraph (g)(5)(i)
                                                review and approval process, NTIA                       prior fiscal year may be assessed by                  of this section.
                                                shall defer to FirstNet with respect to its             FirstNet during the instant fiscal year                  (iii) 15 days after NTIA submits
                                                designated amount, use, and retention                   until such time that NTIA approves                    questions to FirstNet: FirstNet shall
                                                of necessary reserve funds. NTIA shall                  FirstNet’s proposed fees for the instant              submit responses to the questions listed
                                                consider any such designated funds to                   fiscal year pursuant to paragraph (g) of              in paragraph (g)(5)(ii) of this section.
                                                be a part of FirstNet’s total expenses in               this section.                                            (iv) 15 days after NTIA receives
                                                carrying out its powers, duties, and                       (f) Communication of NTIA fee                      responses from FirstNet to NTIA
                                                responsibilities under 47 U.S.C. 1401 et                approval or disapproval. Approval or                  questions, NTIA shall approve or
                                                seq. for the fiscal year involved.                      disapproval of FirstNet-proposed fees                 disapprove FirstNet’s revised proposed
                                                  (c) Determination of fee review. (1)                  shall be communicated in writing by the               fees pursuant to paragraph (d) of this
                                                NTIA shall make one of the following                    Assistant Secretary for Communications                section.
                                                determinations annually upon review of                  and Information and Administrator,
                                                FirstNet’s proposed fees:                               National Telecommunications and                       PARTS 501–549—[RESERVED]
                                                  (i) FirstNet’s proposed fees, in                      Information Administration, U.S.
                                                aggregate, when combined with any                       Department of Commerce, to the Chair                  Subchapter B—(Parts 550–599) [Reserved]
                                                projected non-fee-based income to be                    of the FirstNet Board and FirstNet Chief              [FR Doc. 2017–18221 Filed 8–28–17; 8:45 am]
                                                received by FirstNet, meet but do not                   Executive Officer.                                    BILLING CODE 3510–60–P
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Document Created: 2017-08-29 01:57:57
Document Modified: 2017-08-29 01:57:57
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective on August 29, 2017.
ContactPatrick Sullivan; Office of Public Safety Communications; National Telecommunications and Information Administration; U.S. Department of Commerce; 1401 Constitution Avenue NW., Washington, DC 20230; [email protected]
FR Citation82 FR 40958 
RIN Number0660-AA30

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