FCC Makes DBS Pay Per-Sub User Fee

The FCC has decided to charge DBS providers a regulatory fee based on a per-sub basis, as it does cable and telco MVPD's.

That came in an order released Thursday, where the FCC said in seeking comment on its proposed fees for 2015 ($339,844,000) that it had decided to add DBS to the cable and IPTV category.

The commission also asked, in a Notice of Proposed Rulemaking, whether it should reduce the cable per-sub fee for 2015 to reflect that DBS has joined the group.

The American Cable Association and the National Cable & Telecommunications Association have been asking the FCC to treat DBS the same when it came to fees.

Back in September 2014, the FCC adopted a number of changes to how it collects regulatory fees ($339,844.00 for 2014) from MVPDs, broadcasters and others. As part of that, it also adopted a further notice of proposed rulemaking, the proposal being to start charging DBS operators a per-sub fee, as it does cable operators. Satellite companies now pay a per-license fee.

In issuing its new fee proposal for 2015, the FCC said:

"This proposed fee schedule in Appendix C  includes a new regulatory fee for DBS (a subcategory in the cable television and IPTV category) adopted in the Report and Order. We estimate the number of payment units to be 34,000,000 and propose setting the initial rate at 12 cents per year, or one cent per month. Because DBS regulatory fees offset cable television and IPTV fees, the cable television and IPTV rate would be reduced from $1.01 to $0.95 per subscriber at this rate for DBS. We seek comment on this rate."

"This year, we begin to correct a long-time imbalance in the treatment of multichannel video programming distributors (MVPDs) that exempted two of the nation’s largest MVPDs [Dish and DirecTV] from contributing to the regulatory costs of the Media Bureau because they happened to be satellite operators," said FCC commissioner Ajit Pai, adding "perhaps next year we will reexamine and revise the regulatory fees that broadcasters pay."

Not surprisingly, Dish and DirecTV had opposed the change.

The FCC supports itself entirely through those fees, which it charges based on how much employee time is taken up with filings, applications and other work related to a particular service.

"DBS generates nowhere near the regulatory costs of cable," the companies had told the FCC after it proposed the change. "Cable is subject to a variety of regulation that does not apply to DBS.