FCC Expects to Collect $336 Million in Regulatory Fees
The digital transition prompted many TV stations to jump ship from the formerly desirable VHF channels, and that reordering should affect the regulatory fee structure, commenters told the FCC. The commission agreed the changes will affect how much stations must pay and adjusted its assessment method, though not in the wholesale fashion some commenters wanted. The change is one of the issues noted in the commission’s report on assessment and collection of regulatory fees for 2010, released Friday. The commission said it must collect $335,794,000 in regulatory fees for 2010, down from $341,875,000 in 2009. The fees are meant to cover the cost of the commission’s enforcement, policy and rulemaking, user information and international activities. The commission said it used the same assessment methodology it used last year.
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The FCC expects a significant downward shift in revenue collected from VHF stations, in part because of changes it made to its formula to account for channel changers. For markets 1-10, it expects to collect $1.6 million, down from about $3.3 million in 2009. For markets 11-25 it expects $1.7 million, down from $3.3 million, and for markets 26-50 it expects $1.4 million, down from $2.8 million. The UHF stations, however, will make up the difference, with UHF markets 1-10 expected to bring in $3.8 million, up from $2.1 million, markets 11-25 paying $3.4 million, up from $1.7 million, and markets 26-50 bringing in $2.9 million, up from $1.5 million. It noted that more than 38 percent of entities changed channels from VHF to UHF in the past several months and in some markets, the number of VHF stations decreased by 50 percent. That would mean the regulatory fee for those categories would increase twofold, because the commission allocates expected revenue by category, then calculates individual fees based on the number of units per category. The “potential fee escalation underscores the need for more fundamental, long term reform,” it said. In the meantime, though, it moved the fee amounts that former VHF stations would have owed had they remained VHF into the UHF category and recalculated the UHF fee with those additional dollars. Although this increased fees, the increase is about 20 percent less than what it would have been if the commission followed some suggestions to simply combine all VHF and UHF stations into one category by market size, it said.
The commission also said it needs to reexamine the fees paid by interstate telecommunications service providers, though it said the responses it had received from these providers weren’t as detailed as hoped for. These fees are paid on a percentage of revenue and, although revenue has decreased, the fees paid have increased because the percentage has increased, the commission said. It said it expects to issue a separate call for comments on how changes in the telecommunications marketplace warrant rebalancing of fees, particularly with regard to changes resulting from the National Broadband Plan.
The commission also took comments regarding the fee structure for AM and FM radio stations, but ultimately decided the suggestions are interesting but not practical. Commenters had suggested the commission change to a fee based either on percentage of income or number of people within the city-grade contour. The commission said radio stations are not currently required to report revenue, which would make tracking difficult, and a per-person methodology would mean that in some large markets with many radio stations, like Los Angeles, radio stations would end up paying a fee “for the same person many times over.”