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LEXSEE 58 FR 37840
VOL. 58, No. 132
DEPARTMENT OF AGRICULTURE (USDA)
Fee Schedule for Communications Uses
58 FR 37840
ACTION: Notice of proposed policy; request for public comment.
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SUMMARY: The Forest Service proposes to adopt a revised fee schedule for
annual rental charges for certain communications uses authorized on National
Forest System lands. This proposed schedule would supplement fee schedules for
communications uses adopted by Forest Service Regions in 1989 and modified in
1992. The proposed schedule would complete the agency's efforts to establish
annual rental fees for all communications uses in Forest Service Regions 1-6 and
to establish fees that reflect fair market value, as required by Title V of the
DATES: Comments must be
received in writing by
ADDRESSES: Send written
comments to the Director, Lands Staff (2720),
The public may inspect comments received on this proposed policy in the
Office of the Director, Lands Staff, room 4, South, Auditor's Building, 205 14th
call ahead (202 205-1367) to facilitate entry into the building.
FOR FURTHER INFORMATION CONTACT: John Anderson, Lands Staff, Room 4, South,
Background on Communications Site Fees
Pursuant to statutory and regulatory authority, the Forest Service authorizes
use of National Forest System lands for a variety of public, commercial, and
private activities. There are over 72,000 authorizations in effect on these
Federal lands. Included in this total are about 6,000 authorizations for
communications uses, generally found at high elevation locations and involving
the construction of a building and tower with antennae or the placement of one
or more antennae placed atop a building owned by another permittee. The agency
recognizes 13 types of communications uses; these generally correspond to types
of communications licenses issued by the Federal Communications Commission, and
are grouped into 3 categories, as follows:
Category of Type of use
1. Radio broadcast.
2. Television broadcast.
3. Broadcast translator.
4. Cable and subscription television.
5. Mobile radio: commercial communications.
6. Cellular telephone.
1. Common carrier microwave relay.
2. Industrial microwave relay.
3. Mobile radio: internal communications.
4. Natural resource/environmental monitoring.
5. Passive reflector.
1. Amateur radio.
2. Personal/private "receive only."
Since 1983, the Forest Service has sought to bring annual rental fees for
communications uses authorized to use National Forest System lands to fair
value. Section 504(g) of the
1976 states "The holder of a right-of-way shall pay annually in advance the fair
market value thereof as determined by the Secretary granting, issuing, or
renewing such right-of-way * * *"
Further, the Independent Offices Appropriations Act of 1952 requires the
Federal Government to receive fees for the use of Federal lands and authorizes
heads of agencies to charge fees for services or benefits provided by the agency
that are fair and based on fair market value and cost to the Government. Office
of Management and Budget Circular A-25 implements and further defines the 1952
Act and directs agencies to establish user fees based on sound business
Until 1983, Forest Service fees for communications uses were 0.2 percent of
the permittee's investment plus 5 percent of the rental fees received by a
permittee from sub-tenants of the same facility. An administrative appeal
decision in 1983 concluded that this fee formula did not yield fair market
Consequently, in 1985, the
Register (50 FR 40574), adopted national policy on administration of
communications sites, including direction to its field officers to use current
market data to determine rental fees. These fees were to be determined on a
regional basis by one of three methods: Fee schedules, individual site
appraisals, or competitive bids. The Regional Foresters chose to use fee
schedules. Surveys of lease transactions in the private market were completed in
1986. Those surveys provided the necessary information on fair market value and
were the basis for development and promulgation of proposed regional fee
schedules. Final schedules were adopted by the Regional Foresters through
publication in the Federal Register from 1987-1989. These schedules applied to
communications sites serving mostly rural areas. The notices explained that fees
sites serving urban areas-
on-site appraisals, because the higher values attached to these sites were not
typical of the transactions forming the basis of the fee schedules. (See 54 FR
Because the agency's pre-1985 fee policy for communications sites had no
provision for updating fees, most permittees' fees had remained unchanged for as
long as 20 years. Consequently, when the new fees were placed in effect, these
permittees faced significant fee increases. This led to widespread permittee
complaint to the agency and Congress. In response, in the fiscal year 1990
appropriations act for the agency, Congress adopted an administrative provision
preventing the agency from raising fees for existing communications uses over
amount in effect on
review the regional fee schedules, giving particular emphasis on how the
affected rural communities in the western
findings to the House and Senate Appropriations Committees.
The congressional action did not prohibit the agency from establishing fees
at fair market value for communications uses occupying new facilities after
proceeded to require those obtaining permits after
occupying new facilities to pay annual rental fees based on fair market value.
To provide the factual basis for the congressionally mandated report,
appraisers of the Forest Service and Bureau of Land Management conducted
intensive appraisals of 12 individual communications uses located throughout the
contacted to gain information on lease fees and terms. The report submitted to
the Appropriations Committees in April [*37841] 1991 recommended several
changes to the previously adopted regional schedules. These recommendations were
incorporated as modifications to the 1989 fee schedules through regional notices
sent to communications site permittees in 1992.
Congress, however, felt that the agency's fee determination process was
flawed and that its permittees had not had a sufficient opportunity to
participate in the analysis and report. Consequently, the prohibition on fee
increases for uses authorized prior to 1989 was continued and was extended to
include communications sites on lands administered by the Bureau of Land
Management. The fiscal year 1991 appropriations act provision did allow both
agencies to increase their fees for existing uses up to 15 percent over those
In September 1991, the Forest Service contracted with a private, independent
appraiser to appraise all communications uses at 12 National Forest mountain top
throughout the western
following uniform appraisal practices, examined private leases on lands similar
to those administered by the agency and serving urban populations in
Basin. The appraisals were completed and accepted by the agency in March 1993.
The appraised values for these sites confirmed the influence of population on
communications site rental value. For example, the appraiser concluded that the
value for television broadcast transmitters in the
75,000, while comparable leases on sites serving low population areas in the
Interior West were in the $ 5,000 range. Rental fees for commercial mobile radio
a high of $ 60,000 in the
some areas of the Interior West.
The agency notified each permittee occupying one of the 12 sites by
registered letter of the appraisal and invited the permittees to provide any
communications site lease information and any concerns about the agency's fees
determninations practices. Over 2,000 letters were sent; 106 responses were
received. Following completion of the appraisal, the agency scheduled public
meetings at the 12 locations to allow permittees and others to review the
results with the appraiser. Permittees raised concern over the values resulting
from these appraisals, many of whom assumed that the values translated directly
rental fees. In fact, the appraised values constitute advice to
Service officials charged with the responsibility of establishing fees. These
officials consider a wide range of factors affecting fair market value and do
not limit a fee decision to only appraisal results.
While the on-site appraisals were underway, Congress, through the fiscal year
1992 appropriations act, continued the limitation on fee increases for uses
authorized prior to 1989. In this legislation, Congress also directed the
Secretaries of Agriculture and of the Interior to establish an advisory
committee comprised of representatives of the broadcast industry (radio and
television) to advise the Secretaries of Agriculture and of the Interior on
appropriate methods of determining fees for radio and television broadcast uses
on National Forest System and public lands.
The Radio and Television Broadcast Use Fee Advisory Committee was established
1992. The 11-member committees recommended the use of fee schedules over
individual site appraisals based on cost efficiency and ease of administration.
It also developed and proposed actual fee schedules for radio and television
broadcast uses. The committee considered fee schedules prepared by the agencies
and developed from comparable private lease transactions, including appraisal
information from the 12 communications sites described above. However, the
committee was concerned that these fee schedules would impose fees on
broadcasters that were too substantial. It elected instead to adopt fee
schedules developed from information obtained from several sources, including
informal surveys by its members. The committee first developed estimated rental
fees for television broadcast uses, stratified into population categories using
the broadcast industry's "Area of Dominant Influence" (ADI) market rankings.
Estimated fees for radio broadcast uses were then set at 70 percent of the
television use fee and stratified by population using the "Metro Survey Area"
(MSA) population market rankings for radio. The estimated rental fees for both
television and radio use were then reduced by 30 percent, an amount identified
by the committee as a composite adjustment to account for such factors as public
service by the permittee, differences in rights granted by private and public
leases, and additional costs and administrative burdens imposed by the
requirements of the agencies. In recommending this schedule, the committee
acknowledged that its recommended television and radio fee schedules did not
represent fair market value.
The Advisory Committee made additional recommendations on implementation of
the fee schedules and administration of authorizations. It suggested that
permittees who sublease space to other communications facilities should pay 25
percent of their gross rental income to the Government in addition to the annual
fee. A companion recommendation would require the agencies to adopt a
"footprint" lease in which only the owners of the building would have an
authorization and the tenants would not be issued authorizations by the agencies
as is the current practice. It recommended that the base rental fee be indexed
to the Consumer Price Index-Urban (CPI-U) with annual indexed fee increases of
at least 3 percent but no more than 5 percent. Finally, it recommended that fee
increases of more than $ 1,000 to individual permittees be phased-in over a 2
year period and the entire fee schedule be re-evaluated after a period of no
more than 10 years.
The Acting Secretary of Agriculture, in transmitting the Advisory Committee
report to Congress, endorsed the committee's recommendations on fee
implementation and administration, but rejected the proposed fee schedule on the
basis that it did not represent fair market value, as required by law. The
Acting Secretary praised the work of the committee in providing insights into
the characteristics of the radio and television broadcasting industry but stated
that the committee-recommended fees would deprive the Government and taxpayers
of legitimate revenues totalling millions of dollars each year.
Proposed Fee Schedule
In response to the Secretary's concern, as well as to address the need to
schedules for all categories of communications uses, the
Service and the Bureau of Land Management continued their efforts to develop
market-based fee schedules. The agencies continued to assemble data from many
segments of the communications industry, resulting in a data base incorporating
over 1,500 private lease transactions. The cellular telephone industry, which
had not been included in earlier fee schedules, provided current lease
information that enabled the agencies to develop schedules for this type of use.
The commercial mobile radio segment of the communications industry also
volunteered substantial private lease information from certain markets.
Based on the quantity and quality of its private lease information, and
cognizant of the cost efficiencies and reduced impacts on agency staff obtained
by using fee schedules over on-site appraisals, the Forest Service has decided
to use fee schedules for most communications uses. Thus, it proposes to abandon
its earlier policy of using fee schedules only for sites serving rural areas and
using on-site appraisals for sites serving urban areas.
The agency believes that the statutory requirement for fair market value for
use of communications sites on Federal lands can be obtained from an analysis of
the actions of private property owners that are operating in the competitive
marketplace. The Forest Service and the Bureau of Land Management, using
information gained from the Advisory Committee, hundreds of discussions with
industry representatives and private lessors, commercial communications site
managers, State and local government representatives, appraisers and over 1,500
confirmed private lease transactions, have developed fee schedules for the 4
categories of communications use not previously included in Forest Service fee
schedules. These categories are: (1) FM radio broadcast, (2) television
broadcast, (3) mobile radio commercial, and (4) cellular telephone. In every
case, the fees indicated in the schedule are within the range indicated by the
private lease transactions. The fee schedule is shown in Table I which is set
out at the end of this notice.
Explanation of Table 1
The proposed fee schedule in Table 1 reflects information provided by the
Advisory Committee, industry representatives, lessees and lessors, appraisers,
State and local agencies, commercial site managers, and over 1,500 private
communication site transactions. The market data was separated according to the
category of communications use. Within each category, the individual transaction
was reviewed to identify the ground rent portion of the fees (that is, the
amount of the fee directly attributable to use of the land, excluding amounts
for utilities, roads or other benefits provided by the lessor).
Industry representatives helped define the parameters for the groupings
within each schedule. In the case of television broadcast, the Advisory
Committee recommended the strata be based on the Area of Dominant Influence
(ADI), a market ranking system developed by the Arbitron Company that ranks 210
markets in the
they contain. For radio broadcast, the Advisory Committee suggested the use of
Arbitron Company's Metro Survey Area ranking of 261
not included in the television and radio market survey listings were included in
lowest fee strata. The agencies found that about 50 percent of the
radio markets are not included in the Metro Survey Area rankings. For commercial
mobile radio use, population (based on U.S. Census reports) was used to define
the size of area served by the facility. Cellular telephone use was based on
whether the facility was located within or outside a Standard Metropolitan
Statistical Area, as defined by the U.S. Department of Commerce. The suggested
parameters for each of the 4 uses were validated with the market data in the
agency's market analysis to ensure there was an appropriate correlation.
In establishing fees for each strata, the agencies stayed within the range of
private lease information. Since each strata represented a substantial market
share, fees were established based on the lower range of information found in
Table 1 also addresses the issue of subtenants in lessees communications
facilities. Again, the agencies looked to the market for guidance. In the case
of radio and television broadcast facilities, a range of percentages were found,
averaging about 25 percent. That number was consistent with the Advisory
Committee's recommendation that the Government collect 25 percent of tenant
revenues. This is believed consistent with the practice in the private market
and is proposed to be adopted by the agencies.
In the other categories of use, the agencies were also guided by private
market practice. For example, in most markets, the rentals for commercial mobile
radio facilities are a flat fee. However, newer private leases in the largest
markets indicate an increasing number of transactions where the lessor shares in
the revenues in lieu of a flat fee. The proposed commercial mobile radio fee
schedule reflects this information.
Additional Fee Schedule Considerations
The Forest Service considered several other factors associated with the
adoption of a fee schedule which would be incorporated into the authorization of
a communications site. Such factors include those revealed in the market
analysis and those recommended by the Advisory Committee. Thus, upon adoption of
the fee schedule the agency also proposes to adopt the following terms and
conditions as part of the permit for communications site uses:
1. Annual Indexing
The rental fees shown in Table 1 would be subject to an annual index to
ensure the fee is kept current with fair market value. The agency has found that
use of an index is common practice in the private lease market. Accordingly, it
proposes to use the U.S. Department of Labor, Bureau of Labor Statistics'
Consumer Price Index for All Urban Consumers (CPI-U) as an annual index for
communications site fees. To yield a CPI-U multiplier that would be used to
annually update the communications site fee schedule, the CPI-U for July of the
current year would be divided by the CPI-U for July of the previous year.
2. Footprint Lease
The fee schedule indicates that a permittee owning a communications facility
whose authorizations allows the leasing of space in that facility to other
communications facilities would be required to pay 25 percent of the gross
rental receipts to the Government in addition to the annual rental fee. If
implemented, the agency would no longer require separate authorizations for
tenants in a permittee-owned building. Instead, the agency would issue a
"footprint lease" to the building owner who would be designated as a "facility
manager." Use of the footprint lease would improve the efficiency of the
agency's administration of these multi-user facilities and result in
considerable cost-savings. Further, this practice is commonly found in leases on
private communications sites.
Holders of these leases would be required to submit a certified list to the
agency identifying tenants, fees received, and gross revenue. The lease would
contain a "best efforts" clause assuring that rents are market-based and
correctly reported to the agency. This would be necessary to ensure that there
is no attempt at avoiding the proper fair market value fee.
3. Fee Schedule Phase-In
The agency recognizes that implementation of the proposed fee schedule could
significantly raise fees for some permittees. Thus, it proposes to phase-in the
fee schedule as follows: If the fee increase is $ 1,000 or more, the fee would
be phased-in over a 5 year period at $ 1,000 per year or 20 percent of the total
increase per year, whichever is greater. The full fee, as indicated in the fee
schedule, plus additional annual amounts through indexing, would be reached in
the fifth year. For example, [*37843] for a current fee of $ 1,000 that
increases to a new fee of $ 5,000, the first year fee would be $ 2,000, the
second year would be $ 3,000, continuing until the new fee plus annual indexing
is in place. For a current fee of $ 1,000 that increases to $ 11,000, the first
year fee would be $ 3,000 ($ 1,000 plus 20 percent of $ 10,000), the second year
fee would be $ 5,000, the third year fee $ 7,000, the fourth year fee $ 9,000,
and the fifth year fee $ 11,000, plus annual indexing.
The phase-in of the fee schedule is being proposed as a sound business
management practice. The agency recognizes that the phase-in will result in
reduced receipts to the Treasury in the initial years of the revised fee
schedule implementation. However, the agency believes that the magnitude of some
fee increases under the proposed fee schedule, due in part to the length of time
the fee schedule has been under development and debate, and to its decision to
change the method of determining fair market value to obtain more accurate fees,
could impose an economic burden on some permittees with an associated risk of
adverse impact on their business. The phase-in is proposed to minimize that
4. Reevaluation of the Fee Schedule
The agency proposes to reevaluate the fee schedule in ten years or less to
ensure communications site fees remain at fair market value. Thus, each
permittee's annual rental fee established as a result of this schedule would be
Fee Schedule Implementation
Adoption of this fee schedule
and associated policies will require
Service Region's 1 through 6, generally encompassing National Forest System land
west of the one-hundredth meridian, to modify their existing fee schedules to
incorporate Table 1. Upon adoption of a final fee schedule, the agency will
direct the Regional Foresters to make appropriate revisions to those schedules
and to give notice of those changes in the Federal Register. The agency
anticipates adoption and implementation of a final fee schedule for the 4
described in this notice by
Since the private market analysis completed by the Forest Service and the
Bureau of Land Management focused primarily on communications uses in the
western States, this proposed fee schedule is not intended to guide fees in
Regions 8 and 9, encompassing
the 33 eastern States. Instead, the
will validate the fee schedule's applicability to communications sites in those
States, collect additional market data as necessary, and make any necessary
supplements to the Table 1 fee schedule to incorporate communications sites in
The Forest Service is proposing the fee schedule in Table 1 as a supplement
to the existing 6 western regional fee schedules adopted in 1989 and modified in
1992. The agency believes that the proposed fee schedule meets the statutory and
regulatory requirements to obtain fair market value fees from authorized
commercial and private communications uses on National Forest System lands and
that its adoption would be in the public interest.
The agency's regional offices would make appropriate modifications to
existing fee schedules adopted in 1989, which are incorporated as regional
supplements to title 2700, Special Uses Management of the Forest Service Manual.
If this fee schedule is adopted, it would place most communications uses on
National Forest System lands in Regions 1 through 6 under a fee schedule. The
fee schedule would be validated for use in Regions 8 and 9 in the coming year
and necessary modifications to accommodate communications sites in the eastern
certain situations. For example, a bid procedure may be used where a
communications site is the focus of competition between like facilities. Sites
truly unique characteristics, such as the Aspen-Vail area of
may require use of on-site appraisals.
It is the agency's intention that its fee schedule be fully consistent with
that of the Bureau of Land Management. The Forest Service understands that the
Bureau plans to adopt fee schedules for all communications uses applicable to
lands under its jurisdiction and will incorporate the fee schedules into its
overall communications site fee policy in a separate Federal Register notice.
Comments received on this proposed policy will be considered in the adoption
of the final policy, notice of which will be published in the Federal Register.
This proposed policy would establish a fee schedule to guide the
administrative process of calculating annual fees to be charged holders of
authorizations for communications uses on National Forest System lands. The
schedule would apply to Forest Service Regions 1 through 6 and would be
incorporated into existing regional fee schedules for communications uses. Upon
adoption of a final fee schedule, individual authorization holders would be
notified of the changes in their annual fees.
Section 31.1b of
1992) excludes from documentation in an environmental assessment or impact
statement "rules, regulations, or policies to establish Service-wide
administrative procedures, program processes or instructions." The agency's
preliminary assessment is that this policy falls within this category of actions
and that no extraordinary circumstances exist which would require preparation of
an environmental assessment or environmental impact statement. A final
determination will be made upon adoption of the final policy.
Controlling Paperwork Burdens on the Public
This policy will not result in additional paperwork not already required by
law or not already approved for use. Therefore, the review provisions of the
Paperwork Reduction Act of 1980 (44 U.S.C. 3507) and implementing regulations at
5 CFR part 1320 do not apply.
This proposed policy has been reviewed under USDA procedures and Executive
Order 12291 on Federal Regulations. It has been determined that this is not a
major rule. The rule will not have an effect of $ 100 million or more on the
economy, substantially increase prices or costs for consumers, industry, or
State or local governments, nor adversely affect competition, employment,
investment, productivity, innovation, or the ability of United States-based
enterprises to compete in foreign markets. In short, little or no effect on the
National economy will result from this rule.
This action will bring annual rental fees charged holders of authorizations
for communications sites on National Forest System lands, which have been held
to an artificially low amount for many years, to fair market value as required
by statute and administrative direction.
The fees which would be placed in effect by this proposed policy would remove
the special benefit of low rental charges enjoyed by communications site
authorization holders on the Federal land over those who lease land from private
landowners. The increased [*37844] revenues resulting from this fee schedule
will result in increased payments to States and counties in which the National
Forest System lands containing the authorized facilities are located under
current statutory authorities (16 U.S.C. 500).
Moreover, this policy has been considered in light of the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.), and it has been determined that this
action will not have a significant economic impact on a substantial number of
small entities. The proposed policy and fee schedule is limited to that segment
of the communications industry operating on National Forest System lands. There
are approximately 6,000 communications site permits in effect on these Federal
lands. Available records do not indicate the number of such permits held by
small entities. Further, the statutory and administrative requirements to obtain
fair market value for authorized uses of National Forest System lands do not
provide a basis for charging lower fees to small entities. The phase-in of
annual fees proposed in this notice will allow small entities to adjust the new
fees over a period of time and thus minimize the risk of adverse impact on some
businesses because of the magnitude of the increase in some fees.
In order to provide adequate time for public review and comment and
consideration of those comments in the adoption of a final fee policy and
schedule prior to the next annual fee filing, there was not sufficient time to
permit review and clearance under E.O. 12291 and Federal regulations. The final
policy will be submitted for review under E.O. 12291.
George M. Leonard,
PROPOSED FEE SCHEDULE FOR SELECTED COMMUNICATIONS
NATIONAL FOREST SYSTEM LANDS
Type of Basis of Rental Fee and Proposed
Communications Rental Fee Strata Annual Fee
Television Televison Households
Broadcast Served in Television
Markets Ranked by Area
Dominant Influence fn 1
-750,000 households and $ 45,000 (Plus
-200,000-749,999 $ 19,000 Percent
-120,000-199,999 $ 6,000 From
-50,000-119,999 $ 4,500 Space
-49,999 and less $ 3,000 Rental
and non-ADI areas Income)
FM Radio Number of Persons Aged
Broadcast 12 or older In Radio
Markets Ranked by metro
Survey Area fn 2
-1,000,000 persons and $ 34,000 (Plus
-400,000-999,999 $ 14,000 Percent
-200,000-399,999 $ 5,500 From
-75,000-199,999 $ 4,000 Space
-74,999 and less $ 2,100 Rental
and non-MSA areas Income)
Commercial Number of Persons Within
Mobile Radio Areas Served fn 3
500,000 persons and
more ($ 12,000) fn 4
250,000-499,999 $ 7,500
150,000-249,999 $ 5,000
60,000-149,999 $ 2,500
59,999 and less $ 1,200
Cellilar Within an SMSA. fn 5 $ 7,500
Telephone Outside an SMSA:
-Urban or developed $ 5,000
-Rural or undeveloped $ 2,500
Typer of Examples of Urban Areas Served --
Communications Communications Sites on NFS Lands
Montrose, Craig-Forsyth, Dillon
fn 1 Area of Dominant Influence (ADI) market rankings from
Arbitron Company Data for 1991-1992 reported in
Broadcasting & Cable Market Place, 1992, compiled by R.R.
Bowker, A Reed Reference Publishing Company, New
fn 2 Metro Survey area radio market rankings from Arbitron
Company Fall 1991 market definitions reported in
Broadcasting & Cable Market Place, 1992, compiled by R.R.
Bowker, A Reed Reference Publishing Company, New
fn 3 Based on U.S. Census Bureau estimates of population for the
areas served by the facility.
fn 4 $ 12,000 or 25% of space rental, whichever is greater
fn 5 SMSA: Standard Metropolitan Statistical Area
[FR Doc. 93-16694 Filed
BILLING CODE 3410-11-C