Radio FCC Fees Rise, Though Less Than Expected

It’s official: FCC regulatory fees have increased for US radio and television stations this year. But the increase is lower than that initially proposed.

The National Association of Broadcasters welcomed the adjustment as well as news that the FCC has opened a notice of investigation into the methodologies it uses to calculate fees.

The commission adopted the regulatory fee schedule for fiscal year 2022 on Thursday. commission had proposed and which broadcasters had resisted.

NAB President and CEO Curtis LeGeyt expressed in a statement his appreciation for “the hard work and thoughtfulness of commissioners and their staff to reduce the exorbitant increase that broadcasters are facing in the FCC’s Proposed Regulatory Fees Order”. He said a “bipartisan coalition of lawmakers” had expressed opposition to “overly onerous regulatory fees”.

Here is a table of the new fees for radio stations. They range from $22,390 per station for larger FMs in larger markets, up to $655 for some smaller AMs. (The article continues below the graphic.)

Across all industries, the commission will collect about $381.9 million this year. A calculation by Radio World reveals that AM and FM stations in total will pay around $32.1 million.

In its order, the commission said characterizations of its originally proposed 13% increase were misleading because in 2021 it issued a one-time broadcast fee reduction due to unusual circumstances involving the FCC’s broadband work and an assignment from Congress. He said he would not extend this reduction.

However, the increase in radio fees is 7-8% because the FCC agreed with the broadcasters on one point. It acknowledged that its method of calculating the costs associated with 38 positions (“indirect full-time equivalents”) at the Wireline Competition Bureau was incorrect; he said this should have been corrected sooner, given that broadcasters are clearly not benefiting from activities related to the Universal Service Fund.

No major changes yet

In the remainder of its order, the FCC dismissed most of the broadcasting industry’s arguments and demands regarding its pricing process, at least for now.

There has been much criticism of how the commission assigns “full-time equivalents,” or FTEs, and whether the workload of those employees is correctly attributed to specific industries, which determines to its round the fees for these sectors.

The NAB, state broadcasting associations and individual licensees argued that the commission allocates a disproportionate share of the costs of its 343 “indirect” FTEs to the Media Office. They believe that broadcasters’ fees are inflated to cover the costs of working on unaired issues.

However, “these commentators fail to recognize the fundamental task assigned to the commission,” the FCC wrote.

It said its appropriations for salaries and expenses must also fund costs that “do not relate directly to the oversight and regulation of a particular regulatee, but rather benefit the commission and the industry as a whole. together”. The funds must also cover costs such as rent and utilities, as well as the costs of regulatory entities that are exempt from fees, such as non-profit organizations, amateur radio operators and radio stations and of television not com.

“[R]The regulatory fee is not based on a precise allocation of specific employees with certain work assignments each year and is instead based on a top-tier approach,” he said. For example, “Many lawyers, engineers, analysts, and other commission staff work on a variety of issues in a single fiscal year.”

He provided a detailed rationale for his methodologies and added that “regulatory fees are a zero-sum situation, so any decrease in fees paid by any class of regulated persons, such as broadcasters, requires an increase in fees for others”. Thus, there must be “a very strong rationale” for changing its way of allocating FTEs proportionately.

“We disagree with commentators’ assertion that our methodology is arbitrary and capricious, unfair and illegal,” he said.

(We’ve posted the entire FCC order, including the new fee tables.)

The FCC said another approach to ETPs suggested by state broadcasting associations “would not be manageable given the resources it would take to calculate and the ever-changing nature of the resulting regulatory burdens.” It would be impractical to analyze hundreds of daily tasks of employees and change their assignment to different fee categories as one’s staff receives new assignments and works on different issues. Moreover, he said the results would not change anyway.

(In a lengthy footnote, the FCC also pushed back against complaints that the Media Bureau itself has too many full-time equivalents. “Media Bureau FTEs perform a variety of functions that commentators may not not be aware”, for example the last year of reviewing and processing over 60,000 requests, reports or special requests.)

The panel rejected NAB’s assertion that broadcasters should not take responsibility for the 84 direct Media Bureau FTEs that the FCC says are working to promote a 100% broadband policy.

“The strategic objectives are not aligned with any particular regulatory fee category and the exercise is guided by an entirely separate legislative regime. In addition, these strategic objectives are intended to align with higher level priority objectives of the federal government as a whole.

Some organizations, including the New Jersey Broadcasters Association, had argued that radio/TV fees should be reduced given the pandemic’s impact on stations, broadcasters’ “longstanding special place” in society American and the fact that broadcasters cannot charge subscription fees. . The FCC acknowledged these facts but said it had no discretion to waive or reduce charges on such grounds.

“[W]e cannot reduce the fees for the 2022 financial year generally for a category of fee payer; we cannot redistribute fees between categories based, for example, on relative ability to pay, and we cannot exempt regulated persons based on their financial circumstances. »

Broadcasters have also failed to convince the FCC to raise the “de minimis threshold,” below which a licensee can get an exemption if the FCC decides the cost of collection would exceed the fee itself. .

The threshold is currently set at $1,000 and will remain there. (NAB had proposed $1,200.) The FCC acknowledged that the threshold had the collateral effect of providing financial relief to some regulatees, but said that could not be a factor in its calculations; and he said his average collection cost didn’t get past the $1,000 point.

NAB and others also wanted the commission to revise its methodology to reallocate broadband costs to only those entities that benefit from the FCC’s broadband business. They wanted a category of broadband Internet access service fees, but the commission said no and that, in any case, such a change would not have a big impact on the fees of the broadcasters.

NAB also wanted the FCC to adopt a new category of regulatory fees for unlicensed spectrum users, including big tech companies. Many others objected in their comments, and the commission again said no. He listed a long list of uses for unlicensed spectrum, from garage door openers and microwave ovens to cordless phones and Bluetooth speakers. He sees no “fair or rational way to assess regulatory costs” in such uses.

“The use of unlicensed spectrum is almost ubiquitous in modern society and confers significant benefits,” he said. “Due to the wide variety of uses of unlicensed spectrum, including for non-communication purposes, there is no specific user, service or facility using this spectrum that could form the basis of a similar service regulatory fee category.

“Furthermore, the commission has no reasonable way to comprehensively identify each individual user of unlicensed RF devices. fair and sustainable way…”

The overall result in this order seems mixed for broadcasters; their annual fees have increased, albeit less than originally planned, but many of the larger system changes sought by broadcasters appear to be leading nowhere.

However, the commission has opened a new notice of inquiry, seeking comments on its methods for allocating indirect full-time equivalents, or FTEs. “The responses we receive will help us determine if there are any avenues of research to explore in order to further revise our methodology.” It will take comments through its online comment system under MD Docket No. 22-301.

LeGeyt, the head of the NAB, concluded in his public statement: “We hope that the notice of investigation will serve as a springboard for a thorough modernization of the FCC’s regulatory fee methodology to ensure that all parties using and benefit from the commission’s work pay their fair and appropriate share. It’s no longer enough to tinker around the edges. We remain committed to working with the FCC, regulators, and stakeholders to create a regulatory fee structure that promotes the equity, parity and consistency.

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