Articles Posted in Fees

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The FCC today released an Order waiving, at least for this year, the requirement that full power, Class A and low power television stations file what has traditionally been known as a Form 317 report by December 1.  More formally known as the DTV Ancillary/Supplementary Services Report, and due each December 1 for the past two decades, the reports are now actually filed on Form 2100, Schedule G rather than on the discontinued Form 317 (small wonder that everyone still refers to it as the Form 317 report).

The purpose of the report is to inform the FCC if a TV station has used its spectrum to provide non-broadcast services during the past year, and if so, to submit a payment to the government equivalent to 5% of the gross revenues derived from that service.  Ancillary or supplementary services are all services provided on any portion of a DTV station’s digital spectrum that is not necessary to provide the single free over-the-air program stream required by the FCC.  Any video broadcast service that is provided with no direct charge to viewers is exempt.  According to the FCC, examples of services that are considered ancillary or supplementary include “computer software distribution, data transmissions, teletext, interactive materials, aural messages, paging services, audio signals, subscription video, and the like.”  If the station charges a fee for such a service, it must pay the government 5% of the gross revenues derived from that service when it files its report.

The FCC first adopted the requirement in 1999 as a result of a directive contained in the Telecommunications Act of 1996.  Since then, the rule has required digital full power commercial and noncommercial TV stations, and later Class A and low power television stations, to report annually “whether they provided ancillary or supplementary services in the 12-month period ending on the preceding September 30.”  The rule requiring the filing of these reports mandates that TV stations file them whether or not they have any non-broadcast services to report.  In fact, the rule pointedly says that failure to file “regardless of revenues from ancillary or supplementary services or provision of such services may result in appropriate sanctions.”  As a result, many thousands of these reports have been filed over the years despite the fact that very few stations have ever offered such services.

When the FCC this summer opened the door in its Modernization proceeding for suggestions as to how to eliminate unnecessary regulatory burdens, a chorus rang out in support of modifying this particular rule.  In one of those now glaringly obvious “how could someone not have thought of this twenty years ago?” moments, first Commissioner O’Rielly and then numerous commenters suggested modifying the rule to eliminate the requirement for all stations except those that actually provide such services.  That led to the FCC voting last month to issue a Notice of Proposed Rulemaking proposing to eliminate the filing requirement for all stations that do not offer ancillary or supplementary services.

Buried in a footnote to that NPRM was the answer to a question many of us had asked over the years; namely, what is the percentage of stations indicating they are actually providing such services?  Having been involved in the filing of well over a thousand of these reports over the years, we had yet to file one indicating a station has actually provided ancillary or supplementary services.  Now we know that, according to the NPRM, fewer than 15 stations nationwide offered such services in 2016, yielding a total payment to the government of roughly $13,000.  That’s fewer than fifteen out of more than 6600 reports filed in 2016 (0.2%).

Stated differently, if the FCC had just asked each of those 6600 stations to mail in $2.00 rather than a report, the government would have garnered more revenue while wasting far less station resources.  Of course, that doesn’t take into account the resources the FCC was forced to expend processing 6600 reports looking for the 15 that actually reported revenues, ensuring that fulfilling this congressional mandate currently costs the FCC more than it brings in.

For that reason, today’s Order waiving this year’s filing requirement for stations not offering such services will likely be welcome news not just for those broadcasters, but for FCC staff as well.  It does, however, remain a short-term fix.  The FCC’s proceeding to permanently change the rule is still underway, with the comment deadline not yet set.  Based on today’s waiver, the odds seem pretty good that by the time December 1, 2018 rolls around, a waiver will no longer be necessary as the change will have been incorporated into the rule.  In a time when even the most mundane proposals for change can generate fervent opposition, this may be the rare Commission rule that lacks a constituency to defend it to the death.

So the vast majority of stations that had been drafting their 2017 report can stop right now.  Of course, if your station is one of the lonely 15 that provided ancillary and supplementary services during the past year, the waiver doesn’t apply and you will still need to file the report and pay the FCC 5% of the gross revenues generated.  Then Congress can debate at length where to spend the $13,000.

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[Breaking News: Moments before the release of this post, the FCC issued a Public Notice announcing an extension of time to the end of the government’s fiscal year for regulatory fee payors in areas affected by Hurricanes Harvey and Irma to make their regulatory fee payments.  Regulatees in Florida, Puerto Rico, the US Virgin Islands, and affected portions of Texas, Louisiana, Alabama, and Georgia have until midnight on September 29, 2017 to file and pay their fees.  While that only provides an additional three days to pay, the FCC indicates that anyone needing additional relief can file a request using the Commission’s established deferral/reduction request procedures.]

With the end of the government’s fiscal year comes the obligation to pay the annual regulatory fees that defray the cost of FCC activities for which a separate fee, such as an application processing fee, is not paid.  These activities include, ironically enough, rulemaking and enforcement activities that regulatees might prefer not to fund.

Each year, the FCC is required to conduct a proceeding determining how to allocate the cost of its operations among the various industries and types of entities it regulates.  After soliciting comments on each year’s proposed fees, the FCC releases a final order stating how it will apportion the fees among various regulatee categories for the fiscal year.  Thereafter, it issues a Public Notice announcing the deadline for paying the fees, and releases Fact Sheets for each category of regulatee providing more detailed information about how to pay those particular fees.

Over the course of last week, the FCC released its Report and Order setting this year’s annual regulatory fee amounts and almost immediately thereafter announced that annual regulatory fees are due by September 26, 2017.  It also announced that its Fee Filer system is now open to receive payments.  For Media Bureau regulatees, the FCC released this Fact Sheet setting forth the fees for each class and category of broadcast license.  Licensees subject to the fees must file a report listing the fees they owe through the Fee Filer system and then pay that amount by 11:59 pm (ET) on September 26.

This year’s Regulatory Fee Order contained at least some good news for certain broadcasters in the form of reduced fees.  Specifically, television stations in all market sizes saw modest decreases in their fees over last year, although the FCC continues to question whether there are television stations paying the lower satellite station fee that are not entitled to do so and whether the fee for satellite television stations should be increased substantially next year.

On the radio side, all radio broadcasters with a population served of 75,000 or less also saw a decrease in their fees.  However, that was balanced by an increase in fees for radio stations serving a population of more than 3,000,000, with some of those fees increasing by as much as $5,000.  Radio stations between these two extremes received a mixed bag of increases and decreases, apparently as a result of the FCC’s efforts to make the increments between tiers more proportional.

The Regulatory Fee Order contained particularly good news for some small market “singleton” stations.  The FCC increased the de minimis fee exemption from $500 (it had been $10 before 2014) to $1,000.  When it was $500, the exemption only helped a few licensees of stand-alone translator, booster and low power television stations.  With a $1,000 exemption, many stand-alone AM and some stand-alone FM stations in smaller markets are now also relieved of both the obligation to file the report of fees owed and to pay those fees.  Note that in determining whether the exemption applies, the FCC adds together all of the regulatory fees owed by a regulatee, so a small market licensee will lose the exemption if it has other regulatory fees due that, along with the radio station regulatory fee, add up to more than $1,000.

Regulatees who owe less than $25,000 can pay using a credit card.  Those owing $25,000 or more must use wire transfer, debit card, or bank ACH to pay.  Department of Treasury rules prohibit a single entity from paying more than $24,999.99 to a single government agency in a single day by credit card.  This limit applies whether the payment is made as a single payment or as a series of smaller payments that together add up to $25,000 or more.

Failure to timely pay regulatory fees brings with it a 25% penalty, administrative fees, and should the fees remain unpaid for any length of time, rather merciless fee collection activity from outside collection agencies.  Failure to pay regulatory fees at all (as opposed to paying them late) can bring even greater woes, up to and including loss of license.

So, unless you are in a hurricane-affected area, mark September 26th on your calendar as “Reg Fee Day”.  Like death and taxes, annual regulatory fees have become another certainty of life for those regulated by the FCC.  Unlike death, however, some may qualify for an exemption.

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

Headlines:

  • Broadcaster Loses Appeal of $20,000 FCC Fine
  • FCC Issues Citation for Violations of Radio Frequency Equipment Authorization and Labeling Rules
  • FCC Proposes $392,930 Fine to Telecom Provider for Excessive USF Fees, Unauthorized Transfers, and Delinquent Regulatory Fees

Ninth Circuit Upholds $20,000 Fine Against FM Broadcaster for Unauthorized Operation

The U.S. Court of Appeals for the Ninth Circuit upheld a $20,000 FCC fine against a New Mexico FM broadcaster for operating outside the parameters of the broadcaster’s construction permit.

Section 301 of the Communications Act bans the unlicensed transmission of “energy or communications or signals by radio.” Section 503 of the Act authorizes monetary fines where the FCC finds “willful[] or repeated[]” failure to comply “with the terms and conditions of any license, permit, certificate, or other instrument or authorization” issued by the FCC.

In November 2009, the FCC issued a $20,000 fine to the broadcaster for operating at variance from the broadcaster’s construction permit. Specifically, the FCC found that the station was broadcasting without authorization, and was being operated at a facility 34 miles from its authorized location.

When the broadcaster failed to pay the $20,000 fine, the FCC referred the matter for collections to the Department of Justice (“DOJ”), which, in turn, sued the broadcaster in Nevada District Court to recover the $20,000. The District Court granted the DOJ’s motion for summary judgment, and in doing so upheld the fine against the broadcaster. The broadcaster, representing himself in court, subsequently appealed the District Court’s ruling to the Ninth Circuit.

The Ninth Circuit affirmed the District Court’s ruling, stating that the DOJ provided “substantial” evidence that, for more than a year, the broadcaster “willfully and repeatedly” transmitted radio signals from a different location and at different technical parameters than those specified in the broadcaster’s construction permit. In contrast, the court explained, “taking his submissions in the most generous light, [the broadcaster has] not shown a genuine issue of material fact for trial.” The broadcaster failed to contradict any of the facts underlying the alleged unauthorized operation: (1) because his construction permit required FCC approval before commencing program testing—which the FCC never granted—the transmissions were not valid under the FCC’s Rules; and (2) because the broadcaster transmitted at variance from the terms of the permit, he was not conducting valid equipment tests, which only allow transmission to assure compliance with the permit’s terms. In reviewing the amount of the fine, the Ninth Circuit found the FCC’s decision to impose the full $10,000 base fine for each of the two instances of unauthorized operation “reasonable and not an abuse of discretion.”

Going, Going, but Not Gone: FCC’s Parting Gift to Company Winding Down Business Is Citation for Equipment Authorization and Labeling Violations

The FCC’s Enforcement Bureau issued a citation to a company for marketing radio frequency (“RF”) transmitters that were not properly certified or labeled.

Section 302 of the Communications Act prohibits the manufacture, import, sale, or shipment of home electronic equipment and devices that fail to comply with the FCC’s regulations. Section 2.803 of the FCC’s Rules provides that a device subject to FCC certification must be properly authorized, identified, and labeled in accordance with Section 2.925 of the Rules before it can be marketed to consumers. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

Headlines:

  • FCC Revokes Company’s Authorizations for Failure to Pay Regulatory Fees
  • Failure to Disclose Felonies in License Applications Yields $175,000 Fine
  • Cable Operator Settles Investigation into Unlawful Billing for $2.3 Million

Pay Up or Shut Down: Failure to Pay Regulatory Fees Leads to License Revocation 

In a rare move, the FCC revoked the domestic and international 214 authorizations of a Florida telecommunications company to provide facilities-based and international telecommunications services.

Section 9 of the Communications Act directs the FCC “to assess and collect regulatory fees” to recover costs of certain FCC regulatory activities. When a required payment is not made or is late, the FCC will assess a monetary penalty. Further, Section 9(c)(3) of the Act and Section 1.1164(f) of the FCC’s Rules permits the FCC to revoke authorizations for failure to make timely regulatory fee payments. Under Section 1.1917 of the Rules, a non-tax debt owed to the FCC that is 120 days delinquent is transferred to the Secretary of the Treasury for collection.

In December 2008, the company was authorized to provide facilities-based and resold international telecommunications services. In October 2014, the FCC sent the company a Demand Letter notifying the company of delinquent regulatory fees for fiscal year 2014 and demanding payment. The company failed to respond to the Letter and, as required by Section 1.1917 of the Rules, the FCC transferred the FY 2014 debt to the Secretary of the Treasury. As of July 1, 2016, the company had unpaid regulatory fees of $711.40 for FY 2014, and $3,025.34 for FY 2012. According to the FCC, the company does not appear to have any current customers.

In July 2016, the FCC issued an Order to Pay or Show Cause, instructing the company to demonstrate within 60 days that it paid the regulatory fees and penalties in full, or show why the payment was inapplicable or should be waived or deferred. The Order also explained that failure to comply could result in revocation of the company’s international and domestic authorizations. The company neither responded to the Order nor made any payments.

Citing the company’s failure to either pay its regulatory fees or show cause to remove, waive, or defer the fees, the FCC revoked the company’s international and domestic authorizations. The Revocation Order explicitly stated that such revocation did not relieve the company of its obligation to pay the delinquent fees or “any other financial obligation that has or may become due resulting from the authorizations held until revocation.”

Companies Settle Investigation Into Subsidiaries’ Failure to Disclose Felony Convictions in Wireless Applications With $175,000 Fine

Two engineering corporations, on behalf of themselves and their subsidiaries, entered into a Consent Decree with the FCC to end an investigation into the subsidiaries’ failure to disclose two corporate felony convictions in several wireless license applications. Continue reading →

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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

Markets 1-10 $60,675
Markets 11-25 $45,675
Markets 26-50 $30,525
Markets 51-100 $15,200
Remaining Markets $5,000
Construction Permits $5,000
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
25,001-75,000 $1,475 $1,075 $925 $1,025 $1,625 $1,850
75,001-150,000 $2,200 $1,600 $1,375 $1,525 $2,400 $2,750
150,001-500,000 $3,300 $2,375 $2,075 $2,275 $3,600 $4,125
500,001-1,200,000 $5,500 $3,975 $3,450 $3,800 $6,000 $6,875
1,200,001-3,000,000 $8,250 $5,950 $5,175 $5,700 $9,000 $10,300
3,000,001-6,000,000 $11,000 $7,950 $6,900 $7,600 $12,000 $13,750
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.

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October has come and gone, and now the season is upon us—filing season, that is!  Though winter is coming, December will be a hot month for radio and television FCC filings. Failure to meet any of these filing deadlines could result in fines or lost opportunities, putting a real damper on the holidays.  With that in mind, we’ve compiled a summary of some of the major upcoming filing obligations and deadlines.

  • December 1: Annual DTV Ancillary/Supplementary Services Reports (FCC Form 2100 Schedule G)

Commercial television, digital Class A television, and digital LPTV stations must electronically file by December 1, 2015 FCC Form 2100 Schedule G, the Annual DTV Ancillary/Supplementary Services Report for Commercial Digital Television Stations, regardless of whether they have received any income from transmitting ancillary or supplementary services. If a digital station provided ancillary or supplementary services during the 12-month time period ending September 30, 2015, and received compensation for doing so, that station is required to pay to the FCC five percent of the gross revenue from such services concurrently with the filing of Form 2100 Schedule G.

Note that this Report was formerly known as FCC Form 317.  With the introduction of the FCC’s new Licensing and Management System, it is now FCC Form 2100 Schedule G.

For a more detailed summery of this filing requirement, you can review our Annual DTV Ancillary/Supplementary Services Report Client Advisory.

  • December 1: Annual EEO Public File Reports for AL, CO, CT, GA, MA, ME, MN, MT, ND, NH, RI, SD, and VT

Station Employment Units (“SEUs”) that have five or more full-time employees and are comprised of radio and/or television stations licensed to communities in Alabama, Colorado, Connecticut, Georgia, Maine, Massachusetts, Minnesota, Montana, New Hampshire, North Dakota, Rhode Island, South Dakota, or Vermont must by this date place in their public inspection file and post on their station website a report regarding station compliance with the FCC’s EEO Rule during the period December 1, 2014 through November 30, 2015.

December 1 is also the mid-point in the license renewal term of radio stations licensed to communities in Alabama and Georgia; therefore, by this date radio SEUs with 11 or more full-time employees in these states must electronically file the FCC Form 397 Broadcast Mid-Term Report along with copies of the SEU’s two most recent Annual EEO Public File Reports.

We’ve prepared an Annual EEO Public File Report Client Advisory with more information regarding these obligations.

  • December 1:  Biennial Ownership Reports for Noncommercial  Stations in AL, CO, CT, GA, MA, ME, MN, MT, ND, NH, RI, SD, and VT (FCC Form 323-E)

In addition to their Annual EEO Public File Reports, noncommercial television stations licensed to communities in Colorado, Minnesota, Montana, North Dakota, or South Dakota, and noncommercial radio stations licensed to communities in Alabama, Connecticut, Georgia, Maine, Massachusetts, New Hampshire, Rhode Island, or Vermont (other than sole proprietorships or partnerships composed entirely of natural persons) must electronically file by December 1, 2015 their biennial ownership reports on FCC Form 323-E, unless they have consolidated this filing date with that of other commonly owned stations licensed to communities in other states. The FCC Form 323-E does not require a filing fee.

Note that the Commission’s August 6, 2015 Order extending the biennial ownership report filing deadline for commercial television and radio stations to December 2 does not apply to these Form 323-E filings for noncommercial stations.

Our Noncommercial Station Biennial Ownership Report Client Advisory has more information on this filing requirement.

  • December 2: Biennial Ownership Reports for Commercial Stations (FCC Form 323)

All commercial radio, full-power television, low-power television, and Class A television stations must electronically file by December 2, 2015 their biennial ownership reports on FCC Form 323 and pay the required FCC filing fee. This year, the fee is $65.00 per station. As a reminder, the FCC extended the usual November filing deadline to December through an Order released this summer, giving commercial licensees an additional month to prepare their reports while maintaining the “as of” reporting date of October 1, 2015.

For a more detailed summary of this filing requirement, check out our Commercial Station Biennial Ownership Report Client Advisory.

  • December 18: Spectrum Auction Applications (FCC Form 177)

As we posted last month, the FCC released its Auction Application Procedures Public Notice, announcing the filing window and application procedures to be used for broadcast stations wishing to participate in the spectrum auction. The auction application form, FCC Form 177, must be filed by each licensee interested in participating in the auction.  The application filing window opens at 12 p.m. Eastern Time on December 1, 2015 and runs until 6 p.m. Eastern Time on December 18, 2015.

After the December 18 deadline for filing Form 177, (1) no major changes may be made to the application (e.g., changing the bid options or licenses offered in the auction, or, except in certain circumstances, making major ownership changes), and (2) the Form 177 must be updated within five days of the applicant learning that information in the form is no longer accurate.

FCC staff will send letters to individual applicants indicating that the applicant’s form is (1) complete, (2) rejected, or (3) incomplete or deficient in a minor way that may be corrected. In the case of the third option, the letter will specify a deadline for submitting a corrected application, and applications that are not corrected by that time will be dismissed with no opportunity to refile.

With so many FCC deadlines stacking up in December, we recommend broadcasters start preparing their reports and applications sooner rather than later.  As Dr. Seuss reminded us:

How did it get so late so soon?
It’s night before its afternoon.
December is here before its June.
My goodness how the time has flewn.
How did it get so late so soon?

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As we reported here, the FCC released its proposals regarding 2015 regulatory fees last May. As August turned into September, licensees were getting anxious as to when the FCC would get around to issuing an order setting the fees and opening the “Fee Filer” online payment system. That happened today with the release of this Public Notice and this Report and Order and Further Notice of Proposed Rulemaking (note that for the reasons discussed below, these FCC website links will not function correctly until the FCC’s website resumes normal operation on September 8th).

Continue reading →

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The FCC has released a Notice of Proposed Rulemaking, Report and Order, and Order (really, that’s the title of it) (“NPRM/R&O”) proposing regulatory fees for Fiscal Year 2015 and making other changes to its regulatory fee structure. Comments on the FCC’s proposals are due June 22, 2015, with reply comments due July 6, 2015.

For the fourth consecutive year, the FCC proposed $339,844,000 in regulatory fee payments. The proposed fee tables are attached to the NPRM/R&O as Appendix C and can be used to estimate your likely 2015 regulatory fee burden. Note that effective this year, regulatory fees on Broadcast Auxiliary licenses and Satellite TV construction permits have been eliminated from the fee schedule.

In the NPRM, the FCC requested comment on whether the apportionment of regulatory fees between TV and radio broadcasters should be changed, noting that it expects to collect approximately $28.4 million from radio broadcasters and $23.6 million from TV broadcasters, but that commercial radio stations outnumber commercial TV stations by 10,226 to 4,754. Because the FCC generally allocates regulatory fees based upon the number of FCC employees employed in regulating a particular service, the FCC appears to be suggesting that radio broadcasters may have to shoulder a larger share of the broadcast regulatory fee burden

The FCC also noted that while TV regulatory fees are based upon the size of the DMA in which the TV station is located, radio fees are based upon the population actually served and the class of the station. The NPRM seeks comment on whether changes should be made to this structure, but indicated that any changes made would be unlikely to impact fees this year.

In addition, the FCC requested comment on a petition filed by the Puerto Rico Broadcasters Association requesting regulatory fee relief for broadcasters in Puerto Rico due to economic hardships and population declines specific to Puerto Rico.

Finally, the FCC adopted some changes to its regulatory fee structure. The most significant of these is a new regulatory fee, proposed to be set at $0.12 per subscriber annually, imposed upon direct broadcast satellite (“DBS”) providers (i.e., DISH and DIRECTV). The FCC pointed out that while DBS providers historically have paid regulatory fees with respect to regulation by the International Bureau, they have not paid fees with respect to the Media Bureau which also regulates the service. The payment of fees by DBS providers to recover costs associated with Media Bureau regulation of DBS was teed up in a notice of proposed rulemaking last year and was adopted in the NPRM/R&O.

After comments and reply comments are received, the FCC will release an order setting forth the final 2015 regulatory fee amounts. This order is usually released in August but sometimes isn’t available until September. The order will also establish the precise filing window for submitting regulatory fees, which is typically in the latter part of September.

Those wishing to oppose the proposed regulatory fee changes will need to file their comments and reply comments with the FCC by the respective June 22, 2015 and July 6, 2015 deadlines.

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I wrote a post here in June on the FCC’s release of its proposed regulatory fees for Fiscal Year 2014. Normally, the FCC releases an order adopting the official fee amounts and the deadline by which they must be filed in early to mid-August of each year. This year, however, licensees were beginning to get nervous, as August was coming to a close and there had still been no word from the FCC as to the final fee amounts and how quickly they must be paid.

Fortunately, the FCC was able to get the fee order out this afternoon, on the last business day of August. Unfortunately, because the Public Notice of the release occurred on the Friday before a three day weekend, many licensees may miss that announcement. According to today’s Public Notice, full payment of annual regulatory fees for Fiscal Year 2014 (FY 2014) must be received no later than 11:59 PM Eastern Time on Tuesday, September 23, 2014. As of today, the Commission’s automated filing and payment system, the Fee Filer System, is available for filing and payment of FY 2014 regulatory fees. A copy of the Public Notice with the details is available here.

Also, as noted in a footnote to that Public Notice, “[c]hecks, money orders, and cashier’s checks are no longer accepted as means of payment for regulatory fees. As a result, it is the responsibility of licensees to make sure that their electronic payments are made timely and the transaction is completed by the due date.” Time to rack up those credit card frequent flyer miles!

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With the heat of Summer now upon us, the FCC is gearing up for its annual regulatory fee filing window, which usually occurs in mid-September. Like other federal agencies, the FCC must raise funds to pay for its operations (“to recover the costs of… enforcement activities, policy and rulemaking activities, user information services, and international activities.”). For Fiscal Year 2014, Congress has, for the third year in a row, mandated that the FCC collect $339,844,000.00 from its regulatees.

Accordingly, the FCC is now tasked with determining how to meet the Congressional mandate. At its most basic level, the FCC employs a formula that breaks down the cost of its employees by “core” bureaus, taking into consideration which employees are considered “direct” (working for one of the four core bureaus), or “indirect” (working for other divisions, including but not limited to, the Enforcement Bureau and the Chairman’s and Commissioners’ offices). The FCC factors in the number of regulatees serviced by each division, and then determines how much each regulatee is obligated to pay so that the FCC can collect the $339M total.

In its quest to meet the annual congressional mandate, the FCC evaluates and, for various reasons, tweaks the definitions or qualifications of its regulatee categories to, most often, increase certain regulatory fee obligations. FY 2014 is just such an occasion. In FY 2013, the FCC, which historically has imposed drastically different fees for VHF and UHF television licensees, decided that, effective this year, FY 2014, VHF and UHF stations would be required to pay the same regulatory fees. In addition, a new class of contributing regulatees, providers of Internet Protocol TV (“IPTV”), was established and is now subject to the same regulatory fees levied upon cable television providers. Prior to FY 2014, IPTV providers were not subject to regulatory fees.

The FCC’s proposals for FY 2014 regulatory fees can be found in its Order and Second NPRM (“Order”). In that Order, the FCC proposes the following FY 2014 commercial VHF/UHF digital TV regulatory fees:

  • Markets 1-10 – $44,875
  • Markets 11-25 – $42,300
  • Markets 26-50 – $27,100
  • Markets 51-100 – $15,675
  • Remaining Markets – $4,775
  • Construction Permits – $4,775

Other proposed TV regulatory fees include:

  • Satellite Television Stations (All Markets) – $1,550
  • Construction Permits for Satellite Television Stations – $1,325
  • Low Power TV, Class A TV, TV Translators & Boosters – $410
  • Broadcast Auxiliaries – $10
  • Earth Stations – $245

The proposed radio fees depend on both the class of station and size of population served. For AM Class A stations:

  • With a population less than or equal to 25,000 – $775
  • With a population from 25,001-75,000 – $1,550
  • With a population from 75,001-150,000 – $2,325
  • With a population from 150,001-500,000 – $3,475
  • With a population from 500,001-1,200,000 – $5,025
  • With a population from 1,200,001-3,000,000 – $7,750
  • With a population greater than 3,000,000 – $9,300

For AM Class B stations:

  • With a population less than or equal to 25,000 – $645
  • With a population from 25,001-75,000 – $1,300
  • With a population from 75,001-150,000 – $1,625
  • With a population from 150,001-500,000 – $2,750
  • With a population from 500,001-1,200,000 – $4,225
  • With a population from 1,200,001-3,000,000 – $6,500
  • With a population greater than 3,000,000 – $7,800

For AM Class C stations:

  • With a population less than or equal to 25,000 – $590
  • With a population from 25,001-75,000 – $900
  • With a population from 75,001-150,000 – $1,200
  • With a population from 150,001-500,000 – $1,800
  • With a population from 500,001-1,200,000 – $3,000
  • With a population from 1,200,001-3,000,000 – $4,500
  • With a population greater than 3,000,000 – $5,700

For AM Class D stations:

  • With a population less than or equal to 25,000 – $670
  • With a population from 25,001-75,000 – $1,000
  • With a population from 75,001-150,000 – $1,675
  • With a population from 150,001-500,000 – $2,025
  • With a population from 500,001-1,200,000 – $3,375
  • With a population from 1,200,001-3,000,000 – $5,400
  • With a population greater than 3,000,000 – $6,750

For FM Classes A, B1 &C3 stations:

  • With a population less than or equal to 25,000 – $750
  • With a population from 25,001-75,000 – $1,500
  • With a population from 75,001-150,000 – $2,050
  • With a population from 150,001-500,000 – $3,175
  • With a population from 500,001-1,200,000 – $5,050
  • With a population from 1,200,001-3,000,000 – $8,250
  • With a population greater than 3,000,000 – $10,500

For FM Classes B, C, C0, C1 & C2 stations:

  • With a population less than or equal to 25,000 – $925
  • With a population from 25,001-75,000 – $1,625
  • With a population from 75,001-150,000 – $3,000
  • With a population from 150,001-500,000 – $3,925
  • With a population from 500,001-1,200,000 – $5,775
  • With a population from 1,200,001-3,000,000 – $9,250
  • With a population greater than 3,000,000 – $12,025

In addition to seeking comment on the proposed fee amounts, the Order seeks comment on proposed changes to the FCC’s basic fee formula (i.e., changes in how it determines the allocation of direct and indirect employees and thus establishes its categorical fees), and on the creation of new, and the combination of existing, fee categories. The Order also seeks comment on previously proposed core bureau allocations, the FCC’s intention to levy regulatory fees on AM Expanded Band Radio Station licensees (which have historically been exempt from regulatory fees), and whether the FCC should implement a cap on 2014 fee increases for each category of regulatee at, for example, 7.5% or 10% above last year’s fees. Comments are due by July 7, 2014 and Reply Comments are due by July 14, 2014.