David Oxenford - Color

David Oxenford

By: David Oxenford, Wilkinson Barker Knauer LLP

The FCC’s order on this year’s annual regulatory fees was released by the FCC this week.  The FCC rejected calls to forgive broadcast regulatory fees because of the economic fallout of the pandemic, noting that only Congress could pass such relief, as the FCC is required by law to collect fees sufficient to cover the costs of its operations.  The Commission did, however, offer some terms for the payment over time of the fees by companies that are hard-hit by the economic conditions that resulted from COVID-19, and simplified the waiver process for stations that can demonstrate that they cannot pay the fees without imperiling their service to the public.  The order also rejected the NAB’s request to revisit the fees for radio, though some minor downward adjustments were made in those fees based on the FCC’s finding that it had undercounted the number of radio stations that were to share in the payment of these fees.

The FCC determined that it could not waive all regulatory fees for broadcasters, or broadly excuse them from the 25% late-payment penalty, because these obligations are in the statute and cannot be waived without Congressional authorization.  The FCC is required by law to collect these fees before the October 1 start of the next fiscal year in an amount sufficient to reimburse the US Treasury for the costs of operating the Commission.  While the FCC felt itself powerless to totally waive the rules, it did simplify the process for individual stations to make requests for waiver of the fees if the payment of the fees would imperil their ability to serve the public or to extend the payments out over time – without the need for any upfront payment of a significant portion of the fees.  The FCC noted that the Office of the Managing Director will be issuing a separate Public Notice establishing the process for asking for waiver or deferral, so watch for the notice coming soon as these request will likely need to be filed before the payment deadline, which will also be established in a subsequent public notice.  But the Order does say that the requests for waiver and payment over time can be made in a single email to the FCC, and that the Managing Director’s office is to work with broadcasters to try to help them provide the necessary documentation to support the waiver or deferral of payments.

The fees for television stations are set out in an attachment to the order, and basically follow what was proposed in the Notice of Proposed Rulemaking several months ago.  For radio, the FCC rejected arguments that the NAB had advanced, arguing that the FCC’s methodology of allocating its employees to different services regulated by the Commission (the basis for the computation of fees) allocated too many to broadcast services, and resulted in too big of a burden on radio broadcasters in excess of the benefits they get from regulation.  But the FCC did note that it had undercounted the number of radio stations subject to the fees and thus slightly lowered the amount of the fees for radio broadcasters, as set out on the table below:

FY 2020 RADIO STATION REGULATORY FEES

Population

Served

AM Class A AM Class B AM Class C AM Class D

FM Classes

A, B1 & C3

FM Classes

B, C, C0, C1 & C2

<=25,000 $975 $700 $610 $670 $1,075 $1,225
25,001 – 75,000 $1,475 $1,050 $915 $1,000 $1,625 $1,850
75,001 – 150,000 $2,200 $1,575 $1,375 $1,500 $2,425 $2,750
150,001 – 500,000 $3,300 $2,375 $2,050 $2,275 $3,625 $4,150
500,001 – 1,200,000 $4,925 $3,550 $3,075 $3,400 $5,450 $6,200
1,200,001 – 3,000,000 $7,400 $5,325 $4,625 $5,100 $8,175 $9,300
3,000,001 – 6,000,000 $11,100 $7,975 $6,950 $7,625 $12,250 $13,950
>6,000,000 $16,675 $11,975 $10,425 $11,450 $18,375 $20,925

Watch for further Public Notices from the FCC about the waiver and installment payment process, as well as specific notices as to payment dates and instructions for broadcasters for paying their fees.  These notices should be out soon as these payments must be made in September.

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. 

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