FCC Record, Volume 19, No. 8, Pages 5879 to 6813, March 31 - April 13, 2004 Page: 6,588
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mailing the payment from Minnesota one day prior to the deadline did not demonstrate that the company
mailed the payment in sufficient time for it to reach the Mellon Bank in Pennsylvania.3 Lastly,
McLeodUSA argued that the Commission's FY 2002 regulatory fee system was "likely unconstitutional"
because it violated Article I, Section 7, Clause 1, which requires that "all Bills for raising Revenues shall
originate in the House of Representatives.'4
3. On March 24, 2003, the Office of Managing Director (OMD) denied McLeodUSA's request
for waiver of the late charge penalty.5 OMD stated that 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. OMD also cited the Commission's rules, 47 CFR Section 1.1164, which provide that
"[alny late payment or insufficient payment of a regulatory fee, not excused by bank error, shall subject
the regulatee to a 25 percent penalty of the amount of the fee ...which was not paid in a timely manner.
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." OMD stated that with respect to FY 2001 regulatory fees,
it granted waivers to this rule 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. OMD found that, by contrast, no such extraordinary circumstances existed to
justify waiver of the rule with respect to the FY 2002 fee requirement.
4. OMD also found that McLeodUSA's constitutional challenge was without merit. OMD
noted that Section 9 of the Communications Act, as amended, provides that the Commission shall assess
and collect regulatory fees to recover the costs of specific regulatory activities of the Commission. Citing
United States v. Munoz-Flores, 495 U.S. 385, 398 (1990) and Sperry Corp. v. United States, 925 F.2d 399
(Fed. Cir. 1991), OMD found that a statute that provides for monetary assessments to fund a particular
government program, as does Section 9, "is not a 'Bill for raising Revenue' within the meaning of the
5. In its Application for Review, McLeodUSA argues that OMD did not adequately explain its
decision to deny McLeodUSA's waiver request and reiterates its previous arguments. It also states that
while the events of September 11, 2001 were "clearly unforeseeable," the widespread disruption in the
mail service that was occurring at the time the 2001 regulatory fees were due clearly was not
unforeseeable, as evidenced by the Commission's decision to move the regulatory fee filing deadline
forward by five days. Moreover, McLeodUSA argues that if the Commission believed that five days was
a sufficient amount of time for a regulatory fee payment to be received by the Mellon Bank from
Washington State in the case of West Beach during a time when major mail disruptions were well-known,
then five days was clearly a sufficient amount of time for McLeodUSA's regulatory fee payment to be
received by the Mellon Bank from Iowa, a state 1,900 miles closer during a time when no widespread
disruptions of mail service were occurring. McLeodUSA also submits that even under normal
circumstances mail delays occur, and a company should not be penalized 25% for an interruption that it
cannot control. It states that granting a waiver to McLeodUSA would be appropriate because
McLeodUSA made as much of a good faith effort to timely submit payment of its regulatory fees as West
6. McLeodUSA also asserts that the OMD decision did not adequately address the constitutional
challenge it raised and does not demonstrate how the regulatory fee system falls under the Munoz-Flores
3 See Letter from Mark A. Reger, Chief Financial Officer of the Federal Communications Commission to Michael
0. Ostbye, Rural Services of Central Minnesota, dated May 1, 2002 (Ostbye Letter).
4 U.S. Const. Art. I, Sect. 7, cl. 1.
5 Letter from Mark A. Reger, Chief Financial Officer of the Federal Communications Commission, to David R.
Conn, Deputy General Counsel of McLeodUSA Telecommunications Services, Inc., dated March 24, 2003.
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United States. Federal Communications Commission. FCC Record, Volume 19, No. 8, Pages 5879 to 6813, March 31 - April 13, 2004, book, April 2004; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc4077/m1/729/: accessed February 20, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.