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FCC: No Change to Hardship Waiver Process for Regulatory Fees - Broadcasting & Cable

FCC: No Change to Hardship Waiver Process for Regulatory Fees

State broadcast associations had asked FCC to loosen standard due to economic crisis
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The FCC has decided not to change its hardship waiver process for annual regulatory fees assessed on TV and radio stations, saying it was unnecessary to add layoffs and furloughs to the list and opting for "predictability" over what it said could potentially be a "limitless variety of showings."

That was part of the FCC's notice Friday of the new regulatory fee schedule, which includes a 9.6% hike in order to collect the necessary $341,875,000 "required by Congress."

Radio fees range from a few hundred dollars in the smallest markets to more than $8,000. TV fees range from $5,950 in markets above 100 to $77,575 in a top-10 market and $60,550 in markets 11-25. Midsized markets (51-100) have to pay $22,950.

State broadcast associations had asked the FCC to loosen its waiver standard for financial hardship. They argued that the current economic crisis was "crippling" stations nationwide. They argued that a station demonstrating that its revenues were "down substantially" and that it had to furlough or lay off employees, or could show that it was at risk of defaulting on loans--an all too-common headline in the media businesses--a waiver should be granted."

The FCC said the waiver policy already allowed for various showings of a "compelling" case for financial hardship, including balance sheet info, or evidence of bankruptcy, receivership, or going dark.

Broadcasters have been looking for help a little earlier in the too-familiar downward cycle.

"[E]specially during this period of deep recession," the state associations had written, "if a station shows the Commission (i) that its revenues are down substantially and that it has had to cut expenses, including employee layoffs, furloughs, and salary reductions in order to keep the station operating, or (ii) that it has broken, or is close to breaking, loan covenants or is otherwise in default of its financing, or (iii) that it is on the brink of some form of foreclosure or bankruptcy, a waiver of the FY 2009 regulatory fee payment requirement should be granted."

But the FCC said that it wanted to retain the "predictability" of its current "bright line" standards.

"The Commission does not intend to change these standards at this time and notes that various groups of licensees are impacted by the broader economy from year to year," the FCC said in its order. "Modifying our financial hardship waiver standards to accommodate fluctuating economic changes and a potentially limitless variety of different financial showings would not assure that waivers are granted predictably, fairly, and efficiently, and would therefore not be in the public interest."

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