Cable, DBS Renew Clash Over FCC Regulatory Fees
Cable and direct broadcast satellite interests are locking horns over FY 2018 regulatory fees, echoing what has become an annual fight since the FCC instituted DBS regulatory fees in 2015 (see 1507080013, 1607060023 and 1706230027). Docket 18-175 comments were due Thursday and mostly posted Friday, with replies July 6. An FCC staffer said the International Bureau likely is still digesting the comments and there haven't been wide discussions on the eighth floor about how the agency might view cable or DBS arguments about the FY 2018 regulatory proposal. Small satellite regulatory fees also are coming under fire from commercial and academic interests, and there's jousting about a tiered international bearer circuits (IBC) fee structure.
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DBS operators have had years of notice they will be subject to Media Bureau regulatory fees, and equal distribution of regulatory fees among all MVPDs "would foster competitive parity and technological neutrality," NCTA said. It said even if the agency increases the DBS regulatory fee by a dime to 48 cents per subscriber per year, there's no legitimate reason for it to be 29 cents less than what cable pays. It said the questions raised about full-time employees the bureau devotes to DBS operators vs. cable and IPTV providers ignores that FCC and Communications Act precedent don't require an entity to pay regulatory fees exactly equal to its FTE interaction with the agency, since activity level and interaction can change depending on proceedings. NCTA said the FCC should set a cable/DBS/IPTV regulatory fee that's divisible by 12 to make it easily digested by automated billing and paying systems. It said the current system, with fees often not divisible by 12, sometimes makes operators manually adjust customer bills or reset their billing systems.
The proposed reduction in cable/IPTV regulatory fees from 95 to 77 cents helps close the DBS gap, the American Cable Association said, but there should be a single rate of 67 cents per subscriber for DBS, cable and IPTV. That would complete a "steady march toward parity" the FCC has taken since instituting a DBS fee category in 2015, because many MB FTEs work on MVPD issues that include DBS, it said. The group said that 67 cent fee would raise DBS subscribers' monthly bills by less than 3 cents over 2017 rates, which is negligible.
Dish Network and AT&T said going from a 12-cent fee in 2015 to 48 cents for 2018 can't be justified based on DBS' share of MB resource usage. They said the agency's statutory directive is to collect regulatory fees reasonably equal to the amount associated with certain regulatory activities, not for some result like fee parity with cable/IPTV. "Even worse" than the unjustified proposed hike in DBS regulatory fees is the proposed decrease in what cable systems pay, they said, calling the agency's cost-shifting "inequitable and inconsistent."
Smallsat operators Astro Digital, Planet and Spire Global said many potential licenses under the proposed smallsat licensing process would be granted to early stage companies and to academic institutions that might not have the financial wherewithal to pay large fees. They urged creation in FY 2019 of a smallsat fee category that's 5 percent of what is applicable to other non-geostationary orbit systems.
Academic researchers urged the agency to put the application and regulatory fees for small satellite applicants from educational institutions on par with the fees for Part 5 experimental licenses. The researchers said the agency is considering the application fees in its small satellite NPRM and the annual regulatory fee in the regulatory fee proceeding, but it should "holistically consider the aggregate impact." They said the application fee and two years of ongoing regulatory fees for a smallsat mission could be as much as $43,535 -- vastly more than the $70 application fee for a Part 5 experimental license. The researchers -- from the University of Colorado, University of Florida, Massachusetts Institute of Technology, Montana State University, Morehead State University and North Carolina A&T State University -- said the agency should at least make clear in the regulatory fee proceeding that nonprofit exemptions apply to the streamlined Part 25 satellite rules. They urged eliminating the $13,535 application cost and substantially lowering the Part 25 application fee for educational users.
The Satellite Industry Association said rather than a tiered system for calculating fees for "the tiny proportion" of IBCs offered by satellite, the FCC should exempt satellite IBCs from IBC fees. SIA said if the FCC does adopt a tier-based system, it should reflect the volume of satellite IBCs and be structured to avoid big and unjustified increases. The association said any tiered structure should have a de minimis tier of 100,000 circuits or a multi-tiered structure with two 50,000 tiers at the bottom.
CenturyLink said including non-common carrier terrestrial IBCs helps rationalize the IBC regulatory fee regime, but the FCC needs to go further and assess the fee on a per-Gbps basis. It said a two-tier system would cut the likelihood of over-collection. It said separate fee allocations for satellite and terrestrial IBCs and realigning the revenue requirement for submarine cable operators, terrestrial IBC holders and satellite IBC holders with FTE data would address SIA concerns.