Paying regulatory fees is a part of the yearly calendar for broadcasters and other entities that do business before the FCC. These fees are usually due in August or September, to be paid before the start of the FCC’s fiscal year on October 1. And each year, about this time, the FCC puts out a Notice of Proposed Rulemaking (NPRM), asking about its system for collecting royalties and what changes should be made before fee collection begins in a few months. That order came out yesterday. It resolves some issues left over from last year (deciding, for instance, to assess fees for Direct Broadcast Satellite television providers), and asks many questions – including some about broadcasters. For broadcasters, questions include whether the FCC should adjust the relative percentages of its collections from radio and TV (a question that could pit broadcasters against each other) and whether changes should be made in allocation of fees within a service, adjusting the rates currently paid by different classes of radio and TV stations. The FCC also asks whether it should adopt rules that allow stations in economically depressed areas to get relief from regulatory fees. The fees proposed for broadcasters for this year are set out at the end of this article. Comments on the FCC proposals are due on June 22, and replies by July 6.
Regulatory fees (or “reg fees” to most folks in the communications world) are assessed to recapture from those being regulated the costs of that regulation. To figure out what each regulated commercial entity must pay, the FCC has to try to allocate its budget among the various services that it regulates, based on how many of its employees spend their time regulating a particular industry (based on Full Time Employees – or “FTEs” – an FTE being a person working full-time at the FCC, or, for instance, two half-time employees who together count as a single FTE). So the FCC each year has to go through a complex analysis of the work that it does, and try to allocate the time spent by each of its employees on particular regulated services. As these NPRMs on reg fees make clear, this can be a very difficult process, as there will obviously be some employees who spend time on projects that cut across service lines – e.g. those in the International Bureau who negotiate with foreign governments may benefit broadcasters in some negotiations, and wireline or wireless companies in others. Or the Enforcement Bureau, the Office of the General Counsel and the Commissioner’s staffs may handle a diversity of matters covering all sorts of services. The allocations that are arrived at can be interesting and debatable – and have little to do with the economics of the industries involved or their revenue base. Continue Reading