FCC Record, Volume 19, No. 08, Pages 5879 to 6813, March 31-April 13, 2004

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exception to the Origination Clause requirement. More specifically, McLeodUSA states that Section 9 of
the Act does not create a particular program that the regulatory fees are used to support, but instead raises
revenues to support the government and the Commission generally. Finally, McLeodUSA cites another
proceeding in which similar constitutional issues were raised, where OMD found that "there was some
ambiguity concerning the Commission's policies for implementation of the provisions of Section 9 of the
Act... requiring assessment of a 25 percent penalty for late payment."6 McLeodUSA states that based on
these ambiguities, OMD waived the late charge.
III. DISCUSSION
7. We conclude that the Managing Director's decision is correct. As OMD stated, Section
9(c)() of the Communications Act of 1934, as amended, requires the Commission to assess a late charge
penalty of 25 percent on any regulatory fee not paid in a timely manner. 7 The Commission's rules, also
cited by OMD, provide that "a timely fee payment ... is one received at the Commission's lockbox bank
by the due date specified by the Commission or by the Managing Director."8 In the rulemaking that
implemented Section 9(c)(1), the Commission rejected arguments that it consider a regulatory fee
payment to be timely submitted if the payment is postmarked by the date it is due.9 Instead, the
Commission determined that a regulatory fee is untimely paid when it is not received at the lockbox bank
by the payment date, citing the need to process payments efficiently.'0 The Commission has specifically
rejected arguments that its rules implementing Section 9(c)() are too strict. See Aerco Broadcasting
Corporation, 16 FCC Red. 15,042 (2001) (upholding OMD's denial of waiver of late charge penalty
where payment was mailed two days before the deadline and where preparations for a hurricane could
have delayed delivery of the payment). Insofar as McLeodUSA believes that the Commission should
adopt a more lenient definition of what constitutes a timely fee payment, McLeodUSA's proposal is more
appropriately raised in a petition for rulemaking. In addition, as we stated in Aerco, 16 FCC Red at
15043, "Section 1.1158 of the Commission's rules permits payment of regulatory fees in forms that
would not be affected by extrinsic factors, such as the uncertainties associated with the timing of mail
delivery . . .The rules allow electronic transfer of funds, thus providing greater certainty of timely delivery.
This permits licensees to account for individual circumstances in choosing how to meet their obligations
to make payment in a timely manner."
8. As OMD stated, with respect to FY 2001 regulatory fees, it did not impose the 25% penalty
in some instances in which it found that the untimely receipt of the fee was the result of the clearly
unforeseeable events of September 11, 2001, including the ensuing interruption of mail and air courier
service. As McLeodUSA states, however, OMD did not grant waivers in all cases in which a waiver was
sought for late payment of FY 2001 regulatory fees, but only where the untimely receipt of the fee was a
direct result of the interruption of mail and air courier service in the aftermath of the events of September
11, 2001.11 Thus, only in the most extraordinary circumstances has the Commission waived its late
charge penalty for FY 2001 regulatory fees. Like OMD, we find that no comparable extraordinary
circumstances existed to justify waiver of the 25% penalty with respect to McLeodUSA's FY 2002 fee
requirement. Moreover, the OMD's decision in West Beach does not stand for the blanket proposition
6 Id. at n. 17, citing Letter from Mark A. Reger, Chief Financial Officer of the Federal Communications Commission,
to Dennis J. Kelley, Esq., dated June 24, 2002 (Kelley letter).
7 47 U.S.C. Section 159(c)(1).
8 47 CFR Section 1.1164.
9 Implementation of Section 9 of the Communications Act, Assessment and Collection of Regulatory Fees for the
1994 Fiscal Year, Report and Order, 9 FCC Red 5333, 5353 (1994).
' Id. at 5353, n.23.
11 See Ostbye Letter, where OMD denied petitioner's request for a waiver of a late charge penalty where the
regulatory fee was mailed one day before the due date, thus not ensuring sufficient time for a timely receipt.

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United States. Federal Communications Commission. FCC Record, Volume 19, No. 08, Pages 5879 to 6813, March 31-April 13, 2004. Washington, D. C.. UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metadc4077/. Accessed December 20, 2014.