Today the Federal Communications Commission released its annual Public Notice setting the deadline for paying annual regulatory fees. Payments can be made via the FCC’s Commission Registration System (CORES) beginning today through 11:59 p.m. Eastern Time on September 20, 2023.
In addition to marking this deadline on their calendars, broadcasters should note with some satisfaction that despite the FCC’s overall budget increasing by more than $8,000,000, regulatory fees for broadcasters decreased by between 5 and 8%. That decrease results from years of effort by broadcasters’ state and national trade associations, who have repeatedly argued that the FCC’s methodology for allocating regulatory fees does not accurately reflect how the work of the FCC has changed since the regulatory fee regime was instituted more than 30 years ago.
The FCC’s fee-setting methodology divides its workforce into what it calls direct and indirect FTEs (“Full Time Employees” or “Full Time Equivalents”). Direct FTEs are those who work directly for one of the four “core” licensing bureaus: the International Bureau, the Wireless Telecommunications Bureau, the Wireline Competition Bureau, and the Media Bureau. (The core bureaus will be updated next year to reflect the creation of the new Space Bureau.) Indirect FTEs are all other FTEs of the FCC, which are treated the same as FCC “overhead” (e.g., rent) in setting fees.
The FCC allocates its budget among the regulatees of each of the four core licensing bureaus in proportion to the number of direct FTEs working in that particular bureau. Since the Media Bureau houses approximately 32% of all the direct FTEs, its regulatees, including broadcasters, have to pay 32% of all agency overhead (which includes indirect FTEs) as well.
In recent years, only about one-quarter of the agency’s total FTEs have been considered direct, while the remaining three-quarters are considered indirect. As a result, the determination as to which regulatees must pay the lion’s share of the FCC’s total budget is based on the categorization of those relatively few direct FTEs. This impact is further exacerbated by the existence of indirect FTEs that are housed outside of the four core licensing bureaus, but whose work benefits specific industries. Since they do not work in one of the core bureaus, they are not treated as a direct cost of the industries their work actually benefits, but as just more FCC overhead to be paid for by broadcasters and other industries that do not benefit from their work.
So, what changed this year? In response to an influx of comments the FCC received in response to a Notice of Inquiry and a Notice of Proposed Rulemaking, the FCC reexamined the work performed by FTEs in certain of its indirect bureaus and offices, including the Office of Economics and Analytics, the Office of General Counsel, and the Public Safety and Homeland Security Bureau. Based on this review, the FCC reallocated a large number of these previously indirect FTEs to direct FTE status.
Since few of these reallocated employees were found to do work for industries regulated by the Media Bureau, when the FCC released its Report and Order adopting the 2023 regulatory fees, broadcasters’ fees dropped, despite the increase in the FCC’s budget.
In addition, the FCC created a new category for radio stations that serve a population of 10,000 or less. These stations’ 2023 fees are considerably less than last year’s, and in many cases will fall below the FCC’s $1,000 threshold for a de minimis exception—an amount which the Commission has found to be sufficiently small that the cost of collection exceeds the amount of the fee.
In making regulatory fee payments, note that the FCC’s old Fee Filer system has been retired and regulatory fees must now be paid in CORES. Logging into CORES requires users to set up a personal account using an email and password of their choosing. We provided step-by-step instructions last year in a post that you can find here. As this is still a fairly new system, we suggest logging in early to begin the process, as late or missed payments incur significant interest and penalties.
Stations that are unable to make their regulatory fee payments or which need additional relief such as a payment plan or reduction/deferral of their fees, can still take advantage of the streamlined filing procedures adopted during the pandemic. Again, however, such stations should begin that process now to ensure they are able to meet today’s announced deadline.