The FCC on Tuesday released its Report and Order on regulatory fees. The Order says that the fees will be due by September 24. The FCC should soon issue additional guidance about the exact filing dates and procedures.
In the Order, the FCC did reduce the fees for radio somewhat from those proposed in their Notice of Proposed Rulemaking in May. However, it was not the decrease sought by many broadcast groups. The radio fees, even though reduced, still result in an increase from last year’s fees. The FCC attributed that increase both to a somewhat smaller number of stations and an increase in the operating costs of the FCC that had to be shared among all regulated entities.
The FCC rejected requests to review its prior decision to begin to base TV regulatory fees on the population served by the TV station, rather than based on its DMA. The FCC did, however, announce that it would commence a Further Notice of Proposed Rulemaking to decide whether to reduce the fees paid by VHF stations in the future. Some broadcasters argued that because the real-world digital signal of VHF stations is inferior to that of UHF stations even when both are predicted to serve the same area, VHF stations in fact reach fewer viewers. The FCC will consider that issue for 2020 reg fees.
Also to be considered in this Further Notice is whether stations should pay lower regulatory fees when they are being “incubated” in the FCC’s incubator program designed to encourage new broadcast owners. Comments on the Further Notice will be due 30 days after the FCC’s Further Notice is published in the Federal Register.
While further procedural details on reg fee filing will be coming from the FCC, the Order did emphasize two points. It made clear that the licensee who holds the station license on the date that the fees are due is responsible for paying those fees, even though the fees are based on the status of the station as of October 1, 2018.
Also, the FCC made clear that it will not issue blanket fee waivers for stations in bankruptcy. While the FCC may waive regulatory fees for a licensee that can demonstrate a unique financial hardship, the FCC made clear in the Order that bankruptcy was not automatically a demonstration of that inability to pay. Instead, a licensee in bankruptcy proceedings must show why it filed for bankruptcy, whether it is liquidating its assets or merely doing a reorganization, whether the bankruptcy estate has sufficient funds to pay other creditors, and similar factors. Whether a bankrupt company will receive a waiver will be assessed on a case-by-case basis.
Watch for more details on filing procedures shortly.
Update, 8/28/2019 – The FCC released a Public Notice today clarifying the due date for Regulatory Fees. They are due September 24, not the 30th as we previously reported based on language in the Commission’s Order that had suggested that was the correct date. But, as noted in today’s notice, the fees can be paid now, but must be paid by September 24.