FCC Seeks Comment on Updating Regulatory Fees

Looks to better allocate fees across changed, converging media marketplace

By John Eggerton -- Broadcasting & Cable, 7/18/2012 10:08:41 AM

The FCC wants to know 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 1998.

In a notice of proposed rulemaking released Tuesday, 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 create.

"[N]ew technologies have caused an exponential increase in intermodal competition across formerly distinct industry platforms," the FCC said. "This has made it even more common today than in 1998 that a Commission employee's work may be attributed to more than one fee category. For example, the cost of an employee's work in designing incentive auctions might be attributable to several fee categories within the media sector, but it would also potentially benefit providers of mobile broadband services who would ultimately use the reclaimed spectrum."

The FCC determines the fees for each sector according to how much time employees spend on work that can be assigned to each major bureau -- Wireless Telecommunications, Media, Wireline Competition and International.

The NPRM provides some insight into what the commission suggests would be fairer than the current system. It suggests that imposing the same fee on a Fortune 500 company and small business would have "very different effects." Currently, if both own a station in the same size market, for example, they pay the same fee. The notice also suggests it might not be fair for similar services provided over similar technologies might be paying different fees only because their services fall into different fee categories or don't fit into any existing categories.

"I am pleased that the Commission is seeking additional comments on ways to modify our regulatory fee structure -- a reform which is long overdue," said commissioner Robert McDowell. "As I have said many times in the past, the Commission should update its fee structure to ensure that they are levied not only in a fiscally prudent manner, but in a nondiscriminatory and competitively neutral way as well." He also said he would monitor the proposed changes to make sure the FCC has the legal authority for any changes.

"[T]oday's currency is convergence: Telephone companies have entered the video market, cable operators are winning voice customers, satellite operators offer competitive radio, television, and broadband services, and wireless providers have unleashed a mobile revolution few if any saw coming," said commissioner Ajit Pai. "I look forward to hearing from all interested parties about how we can update our regulatory fee structure to better reflect the current marketplace."