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Broadcasters Take Last-Ditch Stand Against FCC Fees

(Image credit: Birgit R/EyeEm/Getty Images)

Broadcasters are ramping up the pressure, and the rhetoric, in their attempt to get the FCC to hold off on increasing the regulatory fees it charges TV and radio stations, especially during a pandemic that has done a number on revenue. 

The FCC supports itself through its regulatory fees and has proposed increases for broadcasters and others. Official comments were due by the end of last month, but that hasn’t stopped broadcasters from weighing in.

In two socially distanced meetings with FCC staffers, executives with the National Association of Broadcasters said that given the pandemic’s dramatic impact on “certain industries,” the FCC should not raise any industry segment’s contribution, “apart possibly from any planned increases due to previously determined changes in policy.” That appeared to be a reference to the FCC’s ramping up of fees on direct broadcast satellite-TV operators, increases that have been levied incrementally over the past five years to bring them in line with what cable operators pay — though not sufficiently in line or sufficiently fast enough to suit cable operators.

The NAB executives called the FCC’s regulatory-fee process a “frustrating and impenetrable exercise” and came armed with examples:

1) “[T]he commission’s current approach results in broadcasters arbitrarily paying for a higher percentage of FTEs [full-time employees] in offices such as the Office of Engineering and Technology (OET), which is largely focused on unlicensed spectrum issues and provides little to no benefits to broadcasters.” Like a variant of the old lightbulb joke, the FCC apportions fees according to how many FTEs it takes to regulate a particular industry segment.

2) The NAB said the FCC still has not sufficiently explained how it figures out who is working on what. “For example, is staff working on TV broadcaster repacking designated as benefiting broadcasters — who were forced to move frequencies — or wireless companies, the true beneficiaries of the work?”

3) The FCC has not explained how it apportions time spent working on an issue that involves multiple segments, the NAB said. “When ACA Connects files yet another missive on retransmission consent, is that handled by an FTE assigned to cable or broadcast payors? The commission fails to describe how they are apportioned in such circumstances and its rationale for doing so.”

4) The NAB pointed out it already pays a processing fee for applications, so basing the regulatory fee on FTEs working on processing such applications would mean broadcasters are paying twice for the same service.

The NAB also noted that some well-funded tech companies — like Microsoft, which it did not mention — are not charged a fee, though they participate actively in FCC proceedings and generate “significant” staff work and “profit from commission activity without contributing any regulatory fees to support those activities.” Microsoft and the NAB have long squared off in FCC filings over the issue of the white spaces between TV channels that the tech giant wants to go to rural broadband. 

In a separate filing, state broadcast associations said an “untold number” of regulated entities “may well crack under the weight of those regulatory fees.”

The FCC could be a tough sell. While it has been granting plenty of waivers and loosening rules during the pandemic, in May it declined a broadcaster request to hold off and voted to include the fee increase for broadcasters in the 2020 fee collection.