ACA to FCC: Regulatory Fees Should Be Based on Ability to Pay

The American Cable Association has asked the FCC to make
satellite operators pay what ACA says is its fair share of regulatory fees, and
to scale the fees for all regulated entities according to their ability to pay.

The rate would increase with the number of subs, according
to ACA's proposal "so that operators with the largest number of
subscribers and therefore the greatest ability to pay would pay a higher rate
than the operators with fewer subscribers and the least ability to pay."

ACA represents smaller cable operators, for whom such fees --
cable ops pay 95 cents per sub regardless of size, it points out -- represent a
larger percentage of their revenues.

ACA's pitch came in comments at the FCC on a notice of proposed
rulemaking on those fees. The FCC has said the fees need to be both fair and
sustainable. ACA says it agrees, but that foremost should be fairness, which
means based on the ability to pay, like the graduated federal income tax, and
making the two DBS carriers who are the number two and three MVPDs in the
country pay regulatory fees. Satellite operators currently pay on a per-facilities basis rather than per sub.

The FCC's annual budget -- about $350 million -- is funded
almost entirely by regulatory fees.

In the notice, issuedin July, the FCC asked how it should change its regulatory fee structure to
match the "extensive changes" in the communications marketplace. The
FCC has not revamped how it collects fees from the entities it regulates since

The FCC is seeking input on fairness, ability to
administrate it, sustainability, how the direct and indirect costs should be
allocated, and how to mitigate any substantial fee increases realignment could

The commission also asked whether it should start assessing
fees on broadband service.

Not surprisingly, ISPs including those represented by the
National Cable and Telecommunications Association argue that it should not.
Among their reasons are that adding a fee that would be passed on to consumers
could be a disincentive to broadband adoption, because there is not Broadband
Bureau on which to base the fees, which are based on the number of employees
working in four bureaus, International, Wired, Wireless and Media, and because
companies are already paying into those four bureaus, they are already covering
whatever work those employees are doing on broadband.

John Eggerton

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.