FCC Backs Off Steep Fee Hikes for Some After Industry Pressure

posted on 9.03.2019

- Radio/Satellite TV Stations Benefit, Payment Due Sept. 24

The FCC has partially reversed course on its plans to dramatically increase regulatory fees for the new fiscal year after TAB and other industry groups called foul on their methodology. While only Radio and Satellite TV stations will see reductions, the development is notable because it reflects the FCC’s willingness to listen to broadcasters’ concerns, investigate them and adjust course.

Fees will be due by 11:59 p.m. EDT on September 24, 2019. Stations must file via the FCC's Fee Filer system, which is available for use now. Payments may be made online via credit card or debit card, or can be submitted through the Automated Clearing House (ACH) or by wire transfer.

Note that $24,999.99 is the daily maximum that can be charged to a credit card in the Fee Filer system. As a result, many stations may have to pay their fees using the other methods.

In addition, late payments will be subject to a 25% penalty recently authorized by Congress and could subject a regulated entity to sanctions, including withholding action on any applications, petitions or other requests for action. Further, additional processing charges incurred by the government in collecting delinquent debts could be added on top of the penalty.

$3 Million Overpayment by Radio Averted
“When the proposed fee amounts were first announced, they contained a dramatic increase in year-over-year fee amounts for most categories of radio stations,” said Lauren Lynch Flick, attorney with Pillsbury Winthrop Shaw Pittman, TAB’s FCC legal counsel.

“Yet, the reason for this sudden increase was neither addressed by the FCC nor readily apparent from the FCC's brain-numbing summary of its calculation process.”

In response, TAB, its state counterparts and the NAB filed comments pressing the FCC to revisit its fee methodology and to explain or correct what appeared to be flawed data used to calculate broadcast Regulatory Fee amounts.

“In particular (our comments) pressed the FCC to explain why the estimated number of stations slated to cover Radio's share of the FCC's budget had inexplicably plummeted between 2018 and 2019, resulting in each individual station having to shoulder a significantly higher fee burden,” Flick said.

She explained that the Commission acknowledged in its regulatory fee order that its estimate of the number of Radio stations that would be paying regulatory fees in 2019 had been "conservative" and failed to include 553 of the nation's commercial radio stations.

“Once these stations were added to the total number of Radio stations previously anticipated to pay regulatory fees, the impact was to reduce individual station fees from those originally proposed by 9% to 13%, depending on the class of Radio station,” she said.

“This adjustment prevented what would have otherwise been a roughly $3 million overpayment by radio stations nationwide, significantly exceeding the FCC’s cost of regulating radio stations in FY 2019.”

TV Fees: Population vs. Historical vs. Blended Fees
TV stations will note that the FCC’s Report & Order on regulatory fees includes three columns, one for population-based fees, another for historical fees and a third for blended fees.

Attorney Scott Flick, also with the Pillsbury firm, explains that stations will pay the blended fee this year, but that next year’s fee will be closer to the population-based fee.

“The FCC announced last year that it was moving TV to a population-based regulatory fee, and it’s phasing that change in over two years because the difference can be significant for a station,” he said.

“For some stations, the result is a significant increase, and for some a significant decrease.”

Pillsbury FCC Regulatory Fee Advisory

Flick’s Key Take-Away: Broken Formula (emphasis added)
“Even as the FCC spends more of its time and resources on rulemakings, economic analysis, and technical studies surrounding new technologies and new entrants into the communications sector whose main goal is to nibble away at broadcasters' spectrum, audience, and revenue, it still collects regulatory fees only from the licensees and regulatees of its four "core" bureaus – the International Bureau, Wireless Telecommunications Bureau, Wireline Competition Bureau, and Media Bureau.  It's an old formula, and it no longer works.”

Questions? Contact TAB’s Oscar Rodriguez or call (512) 322-9944.

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