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ACA to FCC: Boost DBS Fee ASAP

Cable operators agree that the DBS regulatory fee the FCC plans to assess is the wrong one but for a very different reason.

The FCC has proposed doubling the DBS fee from 12 cents per sub to 24 cents as it phases in its decision to start assessing per sub fees on DBS operators, as it does on other MVPDs (it used to assess a much lower per-license fee).

DBS operators told the FCC that it had not justified the boost and would cause "rate shock" given that the boost would be passed on to customers.

In its reply comments, the American Cable Association doubled down on its initial comments, saying that it agrees the 24 cent fee was not appropriate because it was still 75% lower than the fee on cable operators. "Once again, the proposed rate for DBS is inexplicably and unreasonably low, leaving an unfair share of Media Bureau regulatory fees to be borne by cable operators and IPTV providers," ACA said.

It agrees that the FCC has not justified the 24 cents, but because it is disproportionately low up against the $1 per sub MVPDs are expected to pay per year.

ACA was not buying the DBS argument of "rate shock." It said DBS operators have been on notice for years that would eventually have to pay more. "Moreover, there is no evidence that 'rate shock' occurred when the Commission imposed a 99 cent per subscriber fee on IPTV providers in 2014, or when a 12 cent per subscriber fee was assessed on DBS providers last year, or that the concept has much validity in this context at all."

ACA wants the FCC to immediately level the user fee playing field, charging DBS the same as cable but if not at least to double the fee to 48 cents per sub per year and bring it up to "full parity" by 2017.

The FCC issued a notice of proposed rulemaking (NPRM) in May proposing to double DBS regulatory fees in 2016 from 12 cents per sub to 24 cents.

DBS was moved into the MVPD category at a 12-cent-per-sub fee in 2015. Satellite providers had been paying on a per-satellite-license basis, while other multichannel video programming distributors (MVPDs) paid on a per-subscriber basis. Not surprisingly, cable operators have long pushed for parity.