FCC Takes ‘First Step’ Toward Regulatory Fee Overhaul, Caps Increase at 7.5 Percent
The FCC took the “first step” toward comprehensive overhaul of its full-time employee (FTE) fee system, said an order released Monday (http://bit.ly/16GB8PD). In a series of “interim measures,” the commission revised its calculation of the number of FTEs working on the regulation of interstate telecommunications service providers (ITSPs), and the number of direct FTEs in the International Bureau. Fees won’t go up more than 7.5 percent as a result of the agency’s FTE reallocations, it said. The agency is also changing how certain broadcast licensees that simulcast in analog and digital pay their regulatory fees. The agency declined to act on some big proposals, including combining the ITSP and wireless categories.
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The adopted measures “will better align regulatory fees with regulatory work performed without imposing undue economic hardship on certain regulatees,” the commission wrote. The commission has not conclusively determined what steps to take on many of the issues it raised in its NPRM (CD June 24 p5), it said. The commission intends to require further information in a second FNPRM to be issued shortly, it said. “We recognize that these are complex issues and that resolving them will be difficult. Nevertheless, we intend to conclusively readjust regulatory fees within three years."
Allocations of direct and indirect FTEs were taken from data compiled in 1998. That “may no longer accurately reflect the time that Commission employees devote to these activities,” the order said. “We find no persuasive argument for perpetuating the use of 14 year-old FTE data as the basis for regulatory fees in FY 2013, and we therefore adopt our proposal to use current FY 2012 FTE data to calculate FY 2013 regulatory fees.” The “critical” issue now is to what extent the commission should adjust the new fees to ensure “fairness, sustainability, and administrability,” it said. It’s “reasonable” to readjust assignment of FTEs, the commission said, and it will examine those issues “in the near future."
Although USTelecom and some other commenters opposed the 7.5 percent cap on fee increases -- and the commission agrees with those comments’ contention that ITSP fees should be reduced to more accurately reflect regulatory costs -- “we cannot ‘flash cut’ to immediate, unadjusted use of the FY 2012 FTE data without engendering significant and unexpected fee increase for other categories of fee payers,” said the order. It said the interim 7.5 percent cap is “reasonable."
"Generally, we're pleased that they have departed from their initial proposal and lowered the rate being paid by the ITSP category even further than what they originally proposed,” said Micah Caldwell, Independent Telephone and Telecommunications Alliance vice president-regulatory affairs. “However, we don’t think they went far enough.” ITTA had urged the agency to do a “complete transition” based on its updated FTE data in the current fiscal year, said an earlier filing. Had the agency done so, ITSP category fee payers would have received the full 18.5 percent reduction in regulatory fees to which they are entitled, said Caldwell. ITTA would like to see the FCC complete the full transition by FY 2014, especially “in light of access line losses year over year, which cause wireline regulatory fees to continue to go up,” she said.
The FCC declined to act on several proposals. “Additional time is necessary and appropriate” to determine whether to combine the ITSP and wireless categories; to use revenues in calculating all regulatory fees; and to include DBS providers in a new multichannel video programming distributor category, the commission said.
Some new rules will go into effect in FY 2014: The order consolidated UHF and VHF TV stations into one regulatory fee category. The commission will begin assessing fees on IPTV licensees, with a new category to include both cable and IPTV. All regulatory fee payments will need to be made electronically, and initial regulatory fee assessments won’t go out to CMRS licensees. Unpaid regulatory fees will be transferred to the Treasury Department for collection at the end of the payment period, rather than 180 days later.
"We are pleased that the FCC has at last taken a first step in making assessments for Media Bureau work fairer by assessing regulatory fees on IPTV providers on the same basis as they are assessed on cable operators,” said Ross Lieberman, American Cable Association vice president-government affairs. “ACA is hopeful the FCC completes the job by also assessing DBS providers regulatory fees on the same basis. Finally, we greatly appreciate the FCC’s imposition of a cap on fee increases for FY 2013 to ease the burden that use of updated staff data would otherwise impose on cable operators.”