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. Continue reading →