Today the FCC publicly released a Report and Order eliminating TV stations’ annual obligation to report whether they have provided feeable ancillary or supplementary services on their spectrum during the past year unless they have actually provided such services. The order was originally slated for discussion and a vote at next week’s FCC Open Meeting, but the Commission wound up adopting this widely supported change early, unanimously voting for it on circulation.
Previously, all digital television stations had to report by December 1 of each year whether they had provided feeable ancillary or supplementary services in the past year, what those services were, and then submit payment to the government of 5% of the gross revenue derived from such services. Ancillary and supplementary services are any services provided on a TV station’s digital spectrum that is not needed to provide the single free over-the-air program stream required by the FCC. The reason the word “feeable” is important is that broadcast video streams (i.e., multicast streams) do not trigger payment of the 5% fee. Examples previously provided by the FCC of feeable ancillary and supplementary services include computer software distribution and data transmissions.
Observers had expected this rule change for a while. In the spring of 2017, FCC Chairman Ajit Pai spearheaded the “Modernization of Media Regulation Initiative,” which aimed to institute a massive review of potentially outdated or irrelevant regulations affecting broadcasters, cable system operators, and satellite providers. At Commissioner Michael O’Rielly’s urging, the Commission originally proposed today’s changes in a Notice of Proposed Rulemaking (NPRM) in October 2017. The following month, the Media Bureau spontaneously waived the December 1, 2017 filing deadline for TV stations that had not provided feeable services over the prior twelve-month reporting period, signaling that the proposed rule change was likely coming.
Indeed, the FCC received broad support from commenters for the change. In last year’s NPRM, the FCC noted that of 1,384 full-power commercial TV stations, fewer than 15 reported revenues from ancillary or supplementary services, netting the Commission around $13,000 in fees.
As a result, today’s Order amends Section 73.624(g) of the FCC’s Rules to require that only TV stations actually providing feeable ancillary or supplementary services need file the report in the future. The FCC could find no justification for the immense expense incurred in having broadcasters submit, and the FCC collect and process, forms merely indicating the station hadn’t provided such services. It wasn’t so much the FCC concluding that the expense outweighed the public interest benefit; it was the FCC being unable to point to a public interest benefit.
Which just makes you wonder just how this rule stayed in place for nearly 20 years, and no prior FCC bothered to ask that fundamental question.