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ACA to FCC: DBS Should Pay More

What does ACA want? DBS regulatory fee parity with cable ops. When does it want it? Now.

The American Cable Association wants the FCC to adjust the current regulatory fees for this year to bring DBS fees in line with cable.

The FCC issued a notice of proposed rulemaking (NPRM) last month 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 paid on a per-subscriber basis. Cable operators had pushed for parity.

The FCC is actually proposing 27 cents per sub for DBS—a baseline of 24 cents and another, one-time, three cents per sub for 2016 to cover "facilities reduction costs." The FCC will be: 1) moving to new digs or otherwise reducing its office space footprint to save money; 2) says it will need $44 million to do that; and 3) covers all its expenses via user fees.

ACA says that baseline 24 cents is not enough of a bump given that cable and IPTV providers are being asked to pay a dollar per sub. “There is absolutely no basis for keeping the proposed DBS fee levels over 75% below those proposed for other entities in the Cable/IPTV category. DBS providers should be paying the same Media Bureau regulatory fee,” said ACA president Matt Polka of comments it filed on the FCC proposal.

ACA does not like the idea of what it sees as smaller operators subsidizing larger companies like the merged AT&T and DirecTV.

"AT&T will be assessed starkly lower regulatory fees for its approximately 20 million DirecTV subscribers than it will pay for its approximately 6 million IPTV subscribers, even though all of these services make absolutely comparable use of Media Bureau resources," said ACA.

ACA wants the FCC to charge everybody the same fee, or at least double that 24 cent DBS fee for FY2016 and achieve full parity by FY2017.

For its part, AT&T told the FCC that even the boost to 27 cents (it included the facilities reduction fee) was too high, and argues the FCC did not provide any way for parties to verify or question whether it is justifiable.

As to the facilities reduction fee, AT&T says that is out of bounds because it has nothing to do with recovering the costs of enforcement. The FCC bases the fees on how many full-time employees (FTEs) are needed to regulate a particular service.

In its comments to the FCC this week, AT&T said it opposed both the hike from 12 cents to 27 cents and including the cost of moving to new facilities.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.