By: David Oxenford, Wilkinson Barker Knauer LLP
The FCC released a Public Notice late Friday afternoon (9/4) announcing the annual regulatory fees for 2020 will be due by 11:59 PM Eastern Time on September 25, and setting out the procedures for payment. Another Public Notice announced that the fee filing system is now open to accept fee payment. A third Public Notice set out the procedures for asking for a waiver of the fees based on financial hardship. That notice also sets out how licensees can ask for permission to pay on an installment basis. A further public notice from the Media Bureau, providing details on the filing process for broadcasters, should be released shortly (Update – 9/9/20 – you can read about the Media Bureau Fact Sheet here).
The procedures Public Notice makes clear that all payments need to be made electronically using the Fee Filer system. These payments can be made by any of the following methods:
- Credit Card (i.e., Visa, MasterCard, Discover, and American Express) via Fee Filer
- Wire Transfer
- ACH/Debit from a Bank Account via Fee Filer
- Visa or MasterCard Debit Card via Fee Filer
However, you cannot rack up unlimited points on your credit card, as credit card transactions are limited to $24,999.99 in a single day. The FCC also made clear that entities that owe total annual regulatory fees of $1000 or less are exempt from paying the fees, as these fees are considered de minimis – essentially the costs of collection outweigh the amount that the FCC would otherwise receive.
The Public Notice on the fee waivers is the most detailed of the three notices, setting out the process for seeking a waiver or deferral of the fees. While the FCC will allow a single request to ask for either a waiver or deferral of the fees, just saying that a station suffered from the economic downturn caused by the pandemic will not be enough. Instead, a licensee must provide detailed financial information to show how the payment of fees would imperil its obligation to serve the public.
The financial information must be detailed. The FCC sets out the following information needed to justify such a waiver or deferral:
A request to waive and/or defer payment of FY 2020 regulatory fees on financial hardship grounds must include supporting financial documents to show financial hardship. In order to prove financial hardship sufficient to justify a waiver, a regulatee must show that it lacks sufficient funds to pay its FY 2020 regulatory fee in full while maintaining service to the public. Among the documents that a regulatee may wish to include to prove financial hardship sufficient to justify a waiver are: tax returns, a balance sheet and profit and lost statement (audited if possible), cashflow projections for the next twelve months, a list of officers and highest paid individual employees with each person’s compensation. Regulatees might also include documents demonstrating the pandemic’s effect on its financial decline, such as banking and investment account records, credit card statements, monthly statements of cash receipts and disbursements, accounting ledgers and journals, and loan (including secured and unsecured loans, lines of credit, etc.) documents, including balances owed. For individual regulatees, such documents might include wage statements, documents disclosing non-wage income, such as rental income; real estate valuations and mortgage documents; bank, credit card and loan statements; account numbers and balances for all cash accounts and investments; monthly income and expense summaries.
In other words, the FCC will not simply take your word for the hardship that the pandemic has caused. Nor will it accept generalized statements of the impact. Instead, specific, detailed financial information must be submitted. The Commission notes that, to avoid a 25% penalty, any request for deferral must be submitted by the September 25 deadline. Late payments are also subject to the 25% penalty.
So look at these documents closely and plan to have your fees on file, or waiver request submitted, by the September 25 deadline.
David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access).
There are no additional costs for the call; the advice is free as part of your MAB membership.