SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Notice of Proposed Rulemaking (NPRM), FCC 20-64, MD Docket No. 19-105, and MD Docket No. 20-105, adopted on May 12, 2020 and released on May 13, 2020. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street SW, Room CY-A257, Portals II, Washington, DC 20554, and may also be purchased from the Commission's copy contractor, BCPI, Inc., Portals II, 445 12th Street SW, Room CY-B402, Washington, DC 20554. Customers may contact BCPI, Inc. via their website, http://www.bcpi.com, or call 1-800-378-3160. This document is available in alternative formats (computer diskette, large print, audio record, and braille). Persons with disabilities who need documents in these formats may contact the FCC by email: FCC504@fcc.gov or phone: 202-418-0530 or TTY: 202-418-0432.

I. Procedural Matters

8. Ex Parte Information. This proceeding shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda, or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with section 1.1206(b) of the Commission's rules. In proceedings governed by section 1.49(f) of the Commission's rules or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format ( e.g.,.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

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

10. Initial Paperwork Reduction Act of 1995 Analysis. This document does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see44 U.S.C. 3506(c)(4).

II. Notice of Proposed Rulemaking

11. Congress has required the Commission to collect $339,000,000 in regulatory fees for FY 2020. Section 9 of the Act directs the Commission to set regulatory fees to “reflect the full-time equivalent number of employees within the bureaus and offices of the Commission adjusted to take into account factors that are reasonably related to the benefits provided to the payor of the fee by the Commission's ( printed page 32257) activities.” The Commission implements this directive by looking first to identify the bureaus that conduct work that directly benefits fee payors and their FTEs, in order to establish “direct” FTEs. The remaining FTEs and other Commission costs we categorize as indirect. Once we have identified the direct FTEs by operating bureau, we look within each bureau to allocate fees to specific fee categories. The Commission uses these proportional calculations to allocate all Commission non-auction costs, direct and indirect, across all fee categories. To establish specific fees, the FCC identifies “units” that corollate to the benefit provided; for example, broadcast licensee fees will vary by population served ¹ and wireless licensees will pay fees based on their number of subscribers.

12. The Commission projects approximately $30.52 million (9.00% of the total FTE allocation, 28 direct FTEs) in fees from International Bureau regulatees; $79.57 million (23.47% of the total FTE allocation, 73 direct FTEs) in fees from Wireless Telecommunications Bureau regulatees; $102.46 million (30.23% of the total FTE allocation, 94 direct FTEs) from Wireline Competition Bureau regulatees; and $126.45 million (37.30% of the total FTE allocation, 116 direct FTEs) from Media Bureau regulatees. We seek comment on our calculation for the FY 2020 FTEs (311 direct FTEs).

13. International Bearer Circuits. The regulatory fees associated with IBCs reflect the work performed by the International Bureau, primarily the Telecommunications and Analysis Division and the Office of the Bureau Chief, for the benefit of all U.S. international telecommunications service providers. International telecommunications service is provided over terrestrial, satellite, and submarine cable facilities.

14. IBC fees are currently broken into two components: (1) Terrestrial and satellite circuits, and (2) submarine cable systems. Under this bifurcated approach, based on the 2009 Consensus Proposal from the submarine cable operators, 87.6% of IBC fees are assessed to submarine cable systems and 12.4% to terrestrial and satellite facilities based on relative active or lit capacity at the time.

15. In the Further Notice of Proposed Rulemaking attached to the FY 2019 Report and Order sought comment on appropriate allocation within the IBC fee category in response to assertions regarding the relative benefits received by the different IBC components. The Commission proposes a ratio attributing 95% to submarine cables and 5% to terrestrial and satellite circuits. We seek comment on this allocation.

16. The Commission proposes to simplify the assessment by combining the two categories and assess IBC fees based on a unified fee structure. Under this approach, terrestrial and satellite facility owners will pay regulatory fees based on the number of active international circuits using the rates set out in the tiers. Submarine cable operators would continue to pay regulatory fees for each international submarine cable system based on the active (or lit) capacity of the cable system using the same tier.

17. We seek comment on the use of a unified tiered structure for IBCs and these proposed fees, which are based on a ratio attributing 95% to submarine cables and 5% to terrestrial and satellite international bearer circuits. As an alternative, we seek comment on maintaining the current fee structure for international bearer circuits and having the fees for submarine cables based on the proposed tier structure and assessing fees for terrestrial and satellite capacity at $41 per Gbps circuits.

18. Television Broadcaster Issues. This year the Commission proposes to complete the transition to a population-based full-power broadcast television regulatory fee. In the FY 2018 Report and Order, the Commission adopted the new methodology and determined to fully transition to the methodology by FY 2020. In the interim, for FY 2019, the Commission adopted a blended fee based partly on the historical DMA methodology and partly on the new population-based methodology.

19. Accordingly, the Commission now proposes FY 2020 fees for full-power broadcast television stations to be based on the population covered by a full-power broadcast television station's contour. We also propose adopting a factor of .78 of one cent ($.007837) [per person served] for FY 2020 full-power broadcast television station fees. The population data for broadcasters' service areas are extracted from the TVStudy database, based on a station's projected noise-limited service contour. Table 4 lists this population data for each licensee and the population-based fee (population multiplied by $.007837) for each full-power broadcast television station, including each satellite station. We seek comment on these proposed fees.

20. Puerto Rico Broadcasters. The Puerto Rico Broadcasters contend that the population-based methodology overstates the population served by Puerto Rico stations. The Commission agrees and proposes to adjust the fees of such broadcasters in two discrete ways. First, the Commission proposes to account for the objectively measurable reduction in population by reducing the population counts used in TVStudy by 16.9%, or the decline between the last census in 2010 and the current population estimate. Second, the Commission further proposes to limit the market served by a primary television stations and commonly owned satellite broadcast stations in Puerto Rico to no more than 3.10 million people, the latest population estimate. Under this scenario, the fee for television broadcasters and commonly owned satellites, using the proposed population fee of $.007837, would not exceed $24,300. We seek comment on these proposals.

21. The Commission proposes to continue to assess cable TV systems and IPTV providers at the same rate for regulatory fee purposes. The Commission has increased the DBS regulatory fee by 12 cents per subscriber per year in each subsequent year. The DBS regulatory fee is based on the significant number of Media Bureau FTEs that work on MVPD issues that include DBS, “not a particular number of FTEs focused solely on DBS” or “specific recent proceedings.” For FY 2020, the Commission proposes to continue to phase in the DBS regulatory fee by increasing it by 12 cents per subscriber, to 72 cents. This will result in a $ 0.89 fee per subscriber per year for other MVPDs. We seek comment on this proposal.

22. Economic Effects of COVID-19 Pandemic. The Commission recognizes that the ongoing COVID-19 pandemic is having an impact on some of our regulatees' businesses. While many states in this country have begun to permit or are developing plans to permit businesses to re-open, it is not possible to forecast how quickly or to what extent businesses affected by the pandemic will return to normal levels of operation. We seek comment on how to provide assistance to these regulatees in these circumstances.

23. In this regard, we note that the Commission is constrained in three important aspects. First, we are required by statute to collect our FY 2020 appropriation, $339,000,000, as an offsetting collection from our regulatees by September 30, 2020. Second, the Act requires that the FCC allocate our regulatory fees among regulatees in a proportional manner to fairly reflect the value of FTE work expended to benefit regulatees. Finally, the Commission cannot exempt regulatees that are not expressly exempted under the statute. Thus, the fees cannot be reduced in the proposed FY 2020 fees across-the-board. ( printed page 32258) The Commission cannot re-apportion the fees among categories based on, for example, relative ability to pay, and we cannot exempt regulatees based on their financial circumstances.

24. Within those constraints, the Commission has some flexibility to extend payment terms at nominal interest rates for regulatory fee payors that demonstrate they face significant financial challenges, as the Commission undertook in 2017 and 2018 for regulatees whose businesses were devastated by Hurricanes Florence Harvey, Irma, Maria and Florence. We seek comment on how to facilitate similar or additional relief here where appropriate.

25. Additional Regulatory Fee Reform. The Commission also seeks comment on additional regulatory fee reform and ways to further improve our regulatory fee process to make it less burdensome for all entities, including how our fee setting methodologies could be improved or updated to ensure equitability and the costs and benefits of reforming our fee-setting process.

III. Procedural Matters

26. Included below are procedural items as well as our current payment and collection methods. These payments and collection procedures are included as a useful way of reminding regulatory fee payers and the public about these aspects of the annual regulatory fee collection process.

27. Credit Card Transaction Levels. In accordance with Treasury Financial Manual, Volume I, Part 5, Chapter 7000, Section 7045— Limitations on Card Collection Transactions, the highest amount that can be charged on a credit card for transactions with federal agencies is $24,999.99. Transactions greater than $24,999.99 will be rejected. Customers who wish to pay an amount greater than $24,999.99 should consider available electronic alternatives such as Visa or MasterCard debit cards, ACH debits from a bank account, and wire transfers. Further information can be obtained at https://www.fcc.gov/​regfees.

28. Payment Methods. Pursuant to an Office of Management and Budget (OMB) directive, the Commission has been moving towards a paperless environment. During the fee season for collecting regulatory fees, regulatees can pay their fees by credit card through Pay.gov, ACH, debit card, or by wire transfer. Additional payment instructions are posted on the Commission's website at http://transition.fcc.gov/​fees/​regfees.html.

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

• Media Services: Regulatory fees must be paid for initial construction permits that were granted on or before October 1, 2019 for AM/FM radio stations, VHF/UHF broadcast television stations, and satellite television stations. Regulatory fees must be paid for all broadcast facility licenses granted on or before October 1, 2019.
• Wireline (Common Carrier) Services: Regulatory fees must be paid for authorizations that were granted on or before October 1, 2019. In instances where a permit or license is transferred or assigned after October 1, 2019, responsibility for payment rests with the holder of the permit or license as of the fee due date. Audio bridging service providers are included in this category. For Responsible Organizations (RespOrgs) that manage Toll Free Numbers (TFN), regulatory fees should be paid on all working, assigned, and reserved toll free numbers, including toll free numbers in any other status as defined in section 52.103 of the Commission's rules. The count should be based on toll free numbers managed by RespOrgs on or about December 31, 2019.
• Wireless Services: CMRS cellular, mobile, and messaging services (fees based on number of subscribers or telephone number count): Regulatory fees must be paid for authorizations that were granted on or before October 1, 2019. The number of subscribers, units, or telephone numbers on December 31, 2019 will be used as the basis from which to calculate the fee payment. In instances where a permit or license is transferred or assigned after October 1, 2019, responsibility for payment rests with the holder of the permit or license as of the fee due date.
• Wireless Services, Multi-year fees: The first eight regulatory fee categories in our Schedule of Regulatory Fees pay “small multi-year wireless regulatory fees.” Entities pay these regulatory fees in advance for the entire ten-year term of their initial licenses, and pay regulatory fees again when the license is renewed, or a new license is obtained. These fee categories are included in our rulemaking to publicize our estimates of the number of “small multi-year wireless” licenses that will be renewed or newly obtained in FY 2020.
• Multichannel Video Programming Distributor Services (cable television operators, CARS licensees, DBS, and IPTV): Regulatory fees must be paid for the number of basic cable television subscribers as of December 31, 2019. Regulatory fees also must be paid for CARS licenses that were granted on or before October 1, 2019. In instances where a permit or license is transferred or assigned after October 1, 2019, responsibility for payment rests with the holder of the permit or license as of the fee due date. For providers of DBS service and IPTV-based MVPDs, regulatory fees should be paid based on a subscriber count on or about December 31, 2019. In instances where a permit or license is transferred or assigned after October 1, 2019, responsibility for payment rests with the holder of the permit or license as of the fee due date.
• International Services (Earth Stations, Space Stations (GSO and NGSO): Regulatory fees must be paid for (1) earth stations and (2) geostationary orbit space stations and non-geostationary orbit satellite systems that were U.S licensed, or non-U.S. licensed but granted U.S. market access, and operational on or before October 1, 2019. In instances where a permit or license is transferred or assigned after October 1, 2019, responsibility for payment rests with the holder of the permit or license as of the fee due date. For FY 2020 only, non-U.S. licensed GSO and NGSO satellites that have been granted market access to the U.S. through a Petition for Declaratory Ruling (PDR) or through an earth station have until July 15, 2020 to relinquish their market access status to avoid having to pay FY 2020 regulatory fees in September 2020. If non-U.S. licensed GSO and NGSO satellites, either through a PDR or an earth station, still have market access after July 15, 2020, regulatory fees will be assessed and payment will be required by the due date of FY 2020 regulatory fees.
• International Services ( Submarine Cable Systems, Terrestrial and Satellite Services): Regulatory fees for submarine cable systems are to be paid on a per cable landing license basis based on lit circuit capacity as of December 31, 2019. Regulatory fees for terrestrial and satellite IBCs are to be paid based on active (used or leased) international bearer circuits as of December 31, 2019 in any terrestrial or satellite transmission facility for the provision of service to an end user or resale carrier. When calculating the number of such active circuits, entities must include circuits used by themselves or their affiliates. For these purposes, “active circuits” include backup and redundant circuits as of December 31, 2019. Whether circuits are used specifically for voice or data is not relevant for purposes of determining that they are active circuits. In instances where a ( printed page 32259) permit or license is transferred or assigned after October 1, 2019, responsibility for payment rests with the holder of the permit or license as of the fee due date.

30. Commercial Mobile Radio Service (CMRS) and Mobile Services Assessments. The Commission will compile data from the Numbering Resource Utilization Forecast (NRUF) report that is based on “assigned” telephone number (subscriber) counts that have been adjusted for porting to net Type 0 ports (“in” and “out”). This information of telephone numbers (subscriber count) will be posted on the Commission's electronic filing and payment system (Fee Filer) along with the carrier's Operating Company Numbers (OCNs). A carrier wishing to revise its telephone number (subscriber) count can do so by accessing Fee Filer and follow the prompts to revise their telephone number counts. Providers can view their final telephone counts online in Fee Filer; a final CMRS assessment letter will not be mailed.

31. Carriers that do not file the NRUF report should compute their fee payment using the standard methodology that is currently in place for CMRS Wireless services ( i.e., compute their telephone number counts as of December 31, 2019), and submit their fee payment accordingly. The Commission reserves the right to audit the number of telephone numbers upon which regulatory fees are paid, and submit a bill to the carrier for the difference between what was paid and what should have been paid.

List of Tables

Table 1—Calculation of FY 2020 Revenue Requirements and Pro-Rata Fees

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

Table 2—Regulatory Fees FY 2020

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

( printed page 32261)

Table 3—Space Station Satellite Charts for FY 2020 Regulatory Fees

Table 4—FY 2020 Full-Service Broadcast Television Stations by Call Sign

IV. Initial Regulatory Flexibility Analysis

1. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities by the policies and rules proposed in the Notice of Proposed Rulemaking ( Notice). Written comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadline for comments on this Notice. The Commission will send a copy of the Notice, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the Notice and IRFA (or summaries thereof) will be published in the Federal Register .

2. Need for, and Objectives of, the Proposed Rules. The Notice seeks comment on regulatory fees for fiscal year (FY) 2020, as required by section 9 of the Communications Act of 1934, as amended (Communications Act or Act). The Notice sets forth the proposed regulatory fees for FY 2020 for regulatees in the Wireless Telecommunications Bureau, Media Bureau, Wireline Competition Bureau, and International Bureau. The proposed regulatory fees are attached to the Notice in Tables 1 and 2. This regulatory fee Notice is needed each year because the Commission is required by Congress to adopt regulatory fees each year “to recover the costs of carrying out the activities described in section 6(a) only to the extent, and in the total amounts, provided for in Appropriation Acts.” The objective of the Notice is to propose regulatory fees for FY 2020 and adopt regulatory fee reform to improve the regulatory fee process. The Notice seeks comment on the Commission's proposed regulatory fees for FY 2020. The Notice proposes to collect $339,000,000 in regulatory fees for FY 2020, as detailed in the proposed fee schedules in Tables 1 and 2, including a proposed increase in the DBS fee rate to 72 cents per subscriber and proposed fees for full-power broadcast televisions using the actual population covered by the station's contour, as set forth in Table 4. Historically, under our old methodology, the regulatory fee for full-power broadcast television stations was based on the DMA groupings 1-10, 11-25, 26-50, 51-100, and the remaining markets (101-210), as well as satellite stations that traditionally pay a much lower fee.

3. Legal Basis. This action, including publication of proposed rules, is authorized under sections (4)(i) and (j), 159, and 303(r) of the Communications Act of 1934, as amended.

4. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules and policies, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

5. Small Businesses, Small Organizations, Small Governmental Jurisdictions. Our actions, over time, may affect small entities that are not easily categorized at present. We therefore describe here, at the outset, three broad groups of small entities that could be directly affected herein. First, while there are industry specific size standards for small businesses that are ( printed page 32288) used in the regulatory flexibility analysis, according to data from the SBA's Office of Advocacy, in general a small business is an independent business having fewer than 500 employees. These types of small businesses represent 99.9% of all businesses in the United States which translates to 28.8 million businesses.

6. Next, the type of small entity described as a “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of August 2016, there were approximately 356,494 small organizations based on registration and tax data filed by nonprofits with the Internal Revenue Service (IRS).

7. Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2012 Census of Governments indicate that there were 90,056 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number there were 37,132 General purpose governments (county, municipal and town or township) with populations of less than 50,000 and 12,184 Special purpose governments (independent school districts and special districts) with populations of less than 50,000. The 2012 U.S. Census Bureau data for most types of governments in the local government category show that the majority of these governments have populations of less than 50,000. Based on this data we estimate that at least 49,316 local government jurisdictions fall in the category of “small governmental jurisdictions.” Governmental entities are, however, exempt from application fees.

8. Description of Projected Reporting, Recordkeeping and Other Compliance Requirements for Small Entities. This Notice does not propose any changes to the Commission's current information collection, reporting, recordkeeping, or compliance requirements. Licensees, including small entities, will be required to pay application fees after such fees are adopted.

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

10. The Notice seeks comment on the Commission's proposed regulatory fees for FY 2020. The Notice proposes to collect $339,000,000 in regulatory fees for FY 2020, as detailed in the proposed fee schedules in Table 2, including an increase in the DBS fee rate to 72 cents per subscriber. DBS providers are not small entities. The Notice seeks comment on changing the methodology for assessing regulatory fees for full-power broadcast television stations to use the actual population to determine the regulatory fee. In addition, the Notice seeks comment on the schedule of regulatory fees for all Commission regulatees for FY 2020. The Commission's annual de minimis threshold of $1,000 was replaced last year with a new section 9(e)(2) annual regulatory fee exemption of $1,000; this regulatory fee exemption will reduce burdens on small entities with annual regulatory fees that total $1,000 or less.

A. Federal Rules That May Duplicate, Overlap, or Conflict With the Proposed Rules

11. None.

V. Ordering Clauses

12. Accordingly, it is ordered that, pursuant to the authority found in sections 4(i) and (j), 9, 9A, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 159, 159A, and 303(r), this Report and Order and Notice of Proposed Rulemaking is hereby adopted.