The FCC has released its Report and Order showing the annual regulatory fees due for the 2012 fiscal year. Although the due date has not yet been announced, it will likely be in September. The fees are intended to recover the Commission’s cost of operations, reported to be nearly $340 million. 

Fees must be paid by all commercial FCC licensees and permittees as of October 1, 2011 (the first day of the 2012 fiscal year).  In the event of an assignment or transfer of control after that date, fees are to be paid by the current permittees and licensees as of the payment due date in September.  Noncommercial stations and all nonprofit entities are exempt from paying regulatory fees.

Although a summary of fees is shown below, each licensee or permittee will have to check the FCC website to determine the exact amount of fees owed, since the FCC will not be mailing out any notices of fees due.  Fees paid even one day late will be subject to a 25% penalty plus administrative processing charges, so timely payment is critical.  Unlike the IRS which uses the mailing date to determine timeliness, the FCC requires regulatory fees to be received by the due date to avoid late payment penalties.  Licensees or permittees that fail to pay their regulatory fees in full will not be able to get FCC action on any subsequently filed applications pursuant to the Commission’s "red light" policy until all fees and penalties are paid.

Licensees and permittees will be able to pay by wire, credit card, check, money order or debit card, although all payers will need a an FCC Registration Number (FRN) and completed "Fee Filer Form" 159-E prior to filing.


Continue Reading FCC Announces Regulatory Fees Due for FY 2012

The FCC today released a Notice of Proposed Rulemaking asking for public comment on its proposed Regulatory Fees for 2010. These fees are paid annually by most commercial entities that are regulated by the FCC for the privilege of being regulated. Noncommercial broadcasters are exempt from the annual regulatory fees. Collectively, the FCC is proposing to collect over $335 million in fees this year from licensees across the various regulated services. The fees are normally paid in September, and the specific deadline for the payment of this year’s fees will be set by a future Order after the FCC has received comments on, and formally adopted, this proposed fee schedule. The FCC has set a short time for comments, with initial Comments on the proposed fees due by May 4, 2010, and Reply Comments due on May 11, 2010.

As in the past, the Regulatory Fees for broadcast stations are generally based on the Class of Service and the population covered by a station. For the most part, the fees proposed for 2010 for broadcast stations are not much different from the 2009 rates, with the fees for a few categories of television stations actually going down slightly. Additionally, there is no change in the fee proposed for LPTV, Class A, and television translator stations.  The full list of proposed fees across the various categories of broadcast stations is provided below.  A few things to note with respect to the fees with respect to digital television stations. The NPRM proposes to collect annual regulatory fees from all digital full-service television stations, including any that may have been operating pursuant to Special Temporary Authority (rather than a license) on October 1, 2009.  With respect to low power and Class A television stations, the FCC has proposed that if a station is operating both an analog and a paired digital signal, then only a single regulatory fee will be assessed for the analog facility and no fee would be required for the digital companion channel.

Not surprisingly, the Commission has proposed to make the use of its electronic Fee Filer database  for the submission of the annual regulatory feesmandatory again, as it was in 2009.  It has also proposed that 2010 will be the last year that it will send out reminder letters to broadcast stations about the fees. Starting in 2011, the FCC is proposing to discontinue sending out media notification letters. As the payment deadline will be sometime in September, watch for an Order this Summer adopting the proposed fees, after folks have had a chance to comment. 


Continue Reading FCC Proposes 2010 Annual Regulatory Fees

On September 10, 2009, David Oxenford addressed the Christian Music Broadcasters’ Momentum ’09 Conference in Orlando, Florida.  Dave’ s presentation was titled 18 Issues in 18 Minutes: What a Broadcaster Should Worry About From Washington DC.  In 18 minutes, Dave discussed topics including the FCC’s proposed localism rules, sponsorship identification and noncommercial underwriting issues, contest fines, FCC technical

The FCC has released its Order setting the amounts of the annual regulatory fees for broadcasters – though the window for making those payments has not yet been set.  Look for that window to be set in the near future, as payments will probably be due in September.  Broadcast fees are based on the class of facility and the population covered by the station.  All fees are based on the status of the station as of October 1 of 2008.  Click on "continue reading" below to see the amount of the fees to be paid by broadcasters. 

In its order, the FCC declined a request to broaden the categories of broadcast stations that were suffering from financial hardship justifying a waiver of the rules.  Stations seeking a financial hardship waiver must provide the FCC with sufficient financial information, including profit and loss statements and a showing of how much the station’s owners were receiving as compensation, for the Commission to make a determination that the payment of the fees would pose an undue hardship on the station.  The FCC did say that bankruptcy or receivership, or the fact that a station was silent or dark, would be viewed as evidence of financial hardship. 


Continue Reading FCC Announces Annual Regulatory Fees – Payment Deadlines Not Yet Set

The US Court of Appeals for the District of Columbia today released its decision for the most part rejecting the appeals of webcasters of the 2007 decision of the Copyright Royalty Board setting Internet Radio royalty rates for the use of sound recordings.  The Court generally upheld the Board’s decision, finding that the issues raised by the appealing parties did not show that the decision was "arbitrary and capricious" – a high standard of judicial review that the Courts accord when reviewing supposedly "expert" administrative agency decisions.  On only one issue did the Court have concerns with the CRB’s decision – that being the question of the $500 per channel minimum fees that it had required that webcasters pay.  The Court found that per channel fee, which could result in astronomical fees for some webcasters regardless of their listenership, was not supported by the record evidence, and remanded that aspect of the case to the CRB for further consideration.

The Court surprised some observers by not reaching the constitutional issue of whether the Copyright Royalty Judges were properly appointed.  As we wrote before (see our posts here and here), issues were raised by appellant Royalty Logic, contending that these Judges should be appointed by the President, and not by the Librarian of Congress.  In the recent Court decision on the CRB rates for satellite radio, where the issue had not even been raised, one Judge nevertheless wrote that he questioned the constitutionality of the CRB.  The Court here decided not to decide the issue – finding that it had been raised too late by Royalty Logic, and raised too many fundamental issues (including whether the Register of Copyrights should herself be appointed by the President, potentially invalidating many copyrights) to be decided on the minimal briefing accorded it by the parties.


Continue Reading Court Rejects Webcaster Challenge to Copyright Royalty Board Decision on Internet Radio Royalties – And Does Not Rule on Constitutional Issue of CRB Appointment

In recent months, SESAC has been writing letters to broadcasters who are streaming their signals on the Internet, asking for royalties for the performance of SESAC music on their websites.  More than one broadcaster has asked me why they have any obligation to SESAC when they are already paying SoundExchange for the music that they stream.  In fact, SoundExchange and SESAC are paid for different rights, and thus the payments to SoundExchange have no impact on the obligations that are owed to SESAC.  SESAC, along with ASCAP and BMI, represent the composers of music in collecting royalties for the public performance of their compositions.  SoundExchange, on the other hand, represents the performers of the music (and the copyright holders in those performances – usually the record companies).  In the online digital world, the SoundExchange fees cover the public performance of these recordings by particular performers (referred to as "sound recordings").  For an Internet radio company, or the online stream of a terrestrial radio station, payments must be made for both the composition and the sound recording. 

To illustrate the difference between the two rights, let’s look at an example.  On a CD released a few years ago, singer Madeleine Peyroux did a cover version of the Bob Dylan song "You’re Gonna Make Me Lonesome When You Go."  For that song, the public performance of the composition (i.e. Dylan’s words and music) is licensed through SESAC.  The actual "sound recording" of Peyroux’s version of the song would be licensed through SoundExchange, with the royalties being split between Peyroux and her record label (with backing singers and musicians receiving a small share of the SoundExchange royalty). 


Continue Reading SoundExchange Fees Don’t Cover SESAC Obligations

The week, Congressman Rick Boucher, a member of both the House of Representatives Commerce and Judiciary Committees, told an audience of broadcasters at the NAB Leadership Conference that they should accept that there will be a performance royalty for sound recordings used in their over-the-air programming and negotiate with the record companies about the amount of a such a royalty.  He suggested that broadcasters negotiate a deal on over-the-air royalties, and get a discount on Internet radio royalties.  Sound recordings are the recordings by a particular recording artist of a particular song.  These royalties would be in addition to the payments to the composers of the music that are already made by broadcasters through the royalties collected by ASCAP, BMI and SESAC.   Congressman Boucher heads the Commerce Committee subcommittee in charge of broadcast regulation, and he has been sympathetic to the concerns of Internet radio operators who have complained about the high royalty rates for the use of sound recordings.  Having the Congressman acknowledge that broadcasters needed to cut a deal demonstrated how seriously this issue is really being considered on Capitol Hill.

The NAB was quick to respond, issuing a press release, highlighting Congressional opposition to the Performance royalty (or performance tax as the NAB calls it) that has been shown by support for the Local Radio Freedom Act – an anti-performance royalty resolution that currently has over 150 Congressional supporters.  The press release also highlights the promotional benefits of radio airplay for musicians, citing many musicians who have thanked radio for launching and promoting their careers.   The controversy was also discussed in an article on Bloomberg.com.  In the article, the central issue of the whole controversy was highlighted.  If adopted, how much would the royalty be?  I was quoted on how the royalty could be very high for the industry (as we’ve written here, using past precedent, the royalty could exceed 20% of revenue for large music-intensive stations).  An RIAA spokesman responded by saying that broadcasters were being alarmists, and the royalty would be "reasonable."  But would it?


Continue Reading Congressman Boucher to NAB – Accept Performance Royalty – How Much Would It Cost?