2015 Regulatory Fees Proposed: Stability Reigns (At Least For Now)
Just in time for the Memorial Day weekend, the FCC has released its proposed regulatory fees for 2015. Now we all have something to mull over during all those boring parades, fireworks shows, baseball games and cook-outs. Lucky us!
As usual, the proposed fees are set out in a Notice of Proposed Rulemaking (NPRM ) in which the FCC solicits comments on the proposals, as well as some other incidental matters relating to the fees. While the final figures (usually adopted in July or early August, payable in late August or September) may vary here and there from the proposed fees, generally any changes can be expected to be minor. Still, the NPRM gives one and all an opportunity to comment on the proposals before they get etched in stone (although many may question the utility of trying to sway the Commission on the fee front).
For TV folks, reg fees appear to be stabilizing. Prior to last year, you may recall, the Commission had two separate TV fee schedules, one for VHF, the other for UHF. That differential treatment was tossed out in 2013 (effective with the 2014 reg fees). That led to some rough water on the UHF side - and smooth sailing on the VHF side - last year: VHF licensees noticed a substantial drop in their fees (as much as 48% for some), while UHF licensees suffered a major uptick (running from 15% to 30%). This year the proposed TV rates are proposed to remain largely where they were last year, with only modest (1% - 4%) increases. The only exception: FM/TV Translators and boosters and LPTV licensees, whose fees will go up 6% -- but, since last year's fee was only $410, that amounts to only a $25 hike to $435.
On the radio side, no changes are proposed at all. Since none were made last year, either, that means that, if the current proposals are adopted, the radio industry will not have seen any increase in reg fees for three straight years.
And good news for all broadcasters. Historically the FCC has exempted "de minimis" fees, but it has defined "de minimis" as anything less than ten bucks. As a result, broadcasters have chronically been stuck for payments for their remote pickups, STL's and other such auxiliary licenses, each of which required a $10 fee. But last year the FCC upped the "de minimis" level from $10 to $500. As a result, this year the longstanding $10 broadcast auxiliary fee is gone.
We've prepared a handy table listing the proposed fees (and last year's TV fees, for comparison purposes) - you can check it out here.
When it comes to paying, remembers that last year the Commission imposed an all-electronic payment requirement: no cash or checks accepted. That's still true this year, but heads up. Thanks to our pals at the U.S. Treasury, the maximum payment that will be permitted to be charged to a credit card will be $24,999.99. (This edict came out last year, effective this June.) The old limit was $49,999.99. The new limit applies to single and bundled payments. If you owe more than $24,999.99, you will not be permitted to split it up into multiple payment transactions, nor will you be permitted to pay it over several days by using one or more cards. The FCC recommends that anyone looking at a fee obligation of $25,000 or more consider debit cards, Automated Clearing House (ACH) debits from a bank account, or wire transfers.
In addition to the fees themselves, the NPRM sets out various other proposed changes, several of particular interest.
First, the Commission wants to know whether it might be time to reexamine the apportionment of fees among broadcasters. That could involve a recalculation of the number of FTE's (that's FedSpeak for "Full-Time Employee" or "Full-Time Equivalent") devoted to radio vs. the number devoted to television in order "to more accurately take into account factors related to 'the benefits provided to the payor of the fee by the Commission's activities'". Such a recalculation could lead to readjustments of the overall fees to be collected from both the radio and TV sides.
Second, along the same lines, the FCC is wondering whether the ways in which fees are apportioned within each of the radio and TV sectors should be revisited. On the TV side, fees have historically been assigned according to market ranking; on the radio side, the allotment is based on both population served and type/class of service. The Commission asks for comments on whether these criteria need to be adjusted in any way. Possibilities suggested by the Commission: assess radio fees based on market rather than population served; consolidate the radio categories and reapportion radio fees merely as a function of market rank or population served. The good news is that, even if the Commission eventually opts for some type of reapportionment, the result would not take apply to FY 2015 fees.
Third, the Puerto Rico Broadcasters Association (PRBA) has asked the Commission for relief for Puerto Rican radio broadcasters because of "significant population declines" and other economic factors, including unprecedented unemployment and low per capita income.
The Commission is not unsympathetic to PRBA's request. While the FCC is not inclined to reassess Puerto Rico's population every five years as opposed to every ten years - the necessary information is available from the U.S. Census only every ten years, and anyway, such population statistics would not likely affect things because reg fee calculations don't occur at that "granular" level - the Commission does ask whether the circumstances described by PRBA might warrant either:
- moving the Puerto Rico market stations to a different rate (e.g., reducing them down to a lower population strata) because of the downward trend in the population and other factors; or
- creating a separate fee category for the Puerto Rico market at a lower rate; or
- adopting a special provision in our rules for economically depressed geographic areas to seek a "fast track" waiver of regulatory fees.
The Commission also questions whether the routine waiver process might be adequate to accommodate PRBA's concerns.
If you think you might want to chip in your two cents' worth on the proposed fees or related matters covered in the NPRM, heads up - you don't have much time to work with. Comments on all of the proposals set out in the NPRM are due by June 22, 2015; reply comments are due by July 6. Again, the NPRM - and the fees described in it - are still only proposals.We won't know the final fees until sometime this summer, and we won't know the deadline for paying the fees until sometime later - although the fees are generally due in late August or early/mid-September. Check back here for updates.