Just before the Labor Day weekend, the FCC issued its Report and Order launching the annual regulatory fee payment process for Fiscal Year 2016. The FCC has also opened the “Fee Filer” system that must be used to pay regulatory fees. More information and FAQs about the FY 2016 regulatory fees can be found here.
Payment in full of regulatory fees must be made by 11:59 p.m. Eastern Time on September 27, 2016. Late payment of regulatory fees will result in a 25% penalty and “red light” status, which restricts the FCC’s processing of a late payer’s applications until payment of the fees and penalties has been made. The FCC specifically reminded participants in the ongoing TV broadcast Incentive Auction that they must pay regulatory fees for FY 2016 if they held a license or construction permit as of October 1, 2015 (and will be liable for next year’s fees if they hold a license or CP as of October 1, 2016). The FCC also noted that payment of regulatory fees is required before Incentive Auction participants can receive any proceeds resulting from the auction, although given the pace at which the auction is proceeding, that seems unlikely to be an issue until well into next year.
As expected, regulatory fees for broadcast stations generally increased over last year, and the total fees assessed rose from $339,844,000 in FY 2015 to $384,012,497 in FY 2016. Although the fees assessed for “operational expenses” remained the same as last year, the FCC (in a move which some might find ironic) assessed an additional $44,168,497 to offset FCC “facilities reduction costs.” According to the FCC, those costs reflect the one-time expense of reducing the FCC’s office footprint and/or moving the FCC to a new location, and are required by Congress to be collected.
Despite the increase in total fees, middle market TV stations caught a break, with fees for stations in markets 51-100 falling from $16,275 last year to $15,200 this year. Fees for TV stations in markets 1-10, on the other hand, took the biggest jump — going from $46,825 to $60,675.
As for radio, rates increased over last year for most, but not all, stations. In light of comments asserting that the regulatory fees proposed by the FCC last May were too burdensome for small independent radio stations, the FCC reduced the fees in the two lowest population tiers for AM and FM broadcasters. Stations located in markets with populations of more than 3 million, previously the highest of the radio fee tiers, have been split into two groups by the FCC: (1) markets of 3,000,000-6,000,000, and (2) markets over 6,000,000. Charts showing the regulatory fees for the various TV and radio groups are below:
Broadcast Television and TV/FM Translators and Boosters
|Satellite TV Stations (all markets)||$1,750|
|Low Power TV, Class A TV, TV/FM Translators & Boosters||$455|
Broadcast Radio (AM and Full Power FM)
|Population||AM Class A||AM Class B||AM Class C||AM Class D||FM Classes A, B1 & C3||FM Classes B, C, C0, C1 & C2|
|25,000 or fewer||$990||$715||$620||$685||$1,075||$1,250|
|Greater than 6,000,000||$13,750||$9,950||$8,625||$9,500||$15,000||$17,175|
In addition, initial AM Construction Permits were assessed a $620 regulatory fee per station for FY 2016, with initial FM Construction Permits drawing a regulatory fee of $1,075 per station.
Finally, the FCC rejected a proposal by the Puerto Rico Broadcasters Association to reduce regulatory fees for stations located in Puerto Rico by 30% to reflect the economic hardships being experienced there. The FCC responded that individual stations in Puerto Rico may request waivers of regulatory fees if they believe their conditions warrant such relief, but the Commission was unwilling to reduce the fees on a blanket basis.