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FCC Releases 2007 Regulatory Fees Schedule, Seeks Comment on Collection of Fees From Interconnected VoIP Providers

April 25, 2007

Comments Due: May 3, 2007
Reply Comments Due: May 11, 2007

The FCC recently issued its proposed annual regulatory fees schedule for FY 2007 (attached), substantially retaining the methods and procedures used to calculate and collect regulatory fees in previous years and soliciting comment on ways to improve the process. 

Notably, the Commission seeks comment on its tentative conclusion to assess regulatory fees on interconnected voice over Internet Protocol (“VoIP”) providers.  The Commission bases its legal authority to impose such fees both on the Communications Act’s broad mandate to “assess and collect regulatory fees to recover the costs” of regulatory activities, and on the Commission’s decision during FY 2006 requiring interconnected VoIP providers to contribute to the Universal Service Fund (“USF”).  The Commission has concluded that, like USF contributions, the imposition of regulatory fees on interconnected VoIP providers is reasonably ancillary to the Commission’s obligations under the Act.  To implement its decision, the FCC requests input on whether it should assess such fees based on revenue (the approach utilized for interstate telecommunications service providers (“ITSPs”)), or using a numbers-based approach (consistent with the methodology utilized for commercial mobile radio service providers).

The Commission also seeks comment on, among other things, its tentative conclusion to expand its pre-billing initiative to include earth stations and cable television relay service stations.  Pre-bills, previously sent only to ITSPs and satellite space station licensees, are treated as accounts receivable in the Commission’s accounting system and reflect the amount owed by the regulatee/licensee.   If a pre-bill is not paid by of the last day of the regulatory fee payment window, it becomes delinquent and is subject to the Commission’s debt collection procedures, which are described in more detail below.

            In many cases, the FY 2007 fees are lower than the FY 2006 fees, primarily because Congress has required the FCC to collect only approximately $290 million in FY 2007, a 2.84 percent decrease from FY 2006.  Certain fees which may be of particular interest are:

Cable systems (per basic subscriber)	$0.75 (down from $0.79)
CARS	$185 per station (up from $175)
TV (VHF)	$5,125 to $64,300 (depending on market size)
TV (UHF)	$1,750 to $19,650 (depending on market size)
FM Radio	$575 to $9,125 (depending on class and pop. size)
AM Radio	$400 to $7,275 (depending on class and pop. size)
Broadcast Microwave Auxiliaries	$10 (same as FY 2006)

                                                                         

            As a general matter, regulatory fees for licenses, permits and other authorizations that are not based on a subscriber, unit, or circuit count must be submitted for any authorization held as of October 1, 2006.  In the case of regulated entities whose fees are based on a per basic subscriber or other unit count basis, such as cable system operators, the number of the regulatee’s customers on December 31, 2006 are used to calculate the fee payment under the proposal.   Basic cable subscribers include single family dwellings, each individual household in a multiple dwelling unit, bulk rate customers and courtesy/free service customers. 

Unlike in previous years, cable operators that filed FY 2006 regulatory fees will not be mailed a fee assessment letter.  Instead, the Commission proposes to continue with the practice adopted in FY 2006 of sending e-mail reminders to cable operators that have e-mail addresses populated in the Media Bureau’s Cable Operations and Licensing System to notify them of the amount due and the payment filing window. 

With respect to broadcast stations, the FCC proposes to continue generating regulatory fee assessment postcards that indicate the regulatory fee owed, mailing them to the licensee’s primary and secondary contact persons identified in the Commission’s Consolidated Database System.  The postcards will also direct parties to an FCC website, www.fccfees.com, to update or correct fee information, or to certify their fee-exempt status (typically only for governmental entities), as necessary.

As in the past, regulated entities whose total regulatory fee liability amounts to less than $10 will be exempt from paying such fees.  Payment of regulatory fees may be made either via paper or electronically during or before the August-September fee filing window.  Late payments are subject to a 25% penalty and administrative processing charges, and failure to pay could result in the Commission’s withholding of action on and/or dismissal of applications filed by licensees/regulatees.  Nonpayment also could result in initiation of authorization revocation proceedings.  Additional details regarding payment procedures and filing window dates should soon be available on the FCC’s website.

We would be pleased to respond to any questions regarding these matters, or to provide assistance with preparation of regulatory fee materials for submission to the Commission.

Proposed FY 2007 Schedule of Regulatory Fees

 

1. As indicated in the attached fee schedule, there are no regulatory fee obligations imposed on digital television stations.  Stations that broadcast in both analog and digital format must pay regulatory fees only with respect to their analog facilities.  Stations that operate in digital-only format do not have to pay any regulatory fees. 

 

2. Cable operators can base the required subscriber count on a typical day during the last week of December 2006, rather than on December 31, 2006 specifically.

 

 

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