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FCC Proposes Regulatory Fees for 2020 Amid Uncertain Media Marketplace

Proposal of $339 million is the exact amount requested in fiscal year 2019

Though impassioned letters were sent pressing the Federal Communications Commission to outright waive regulatory fees for media companies in 2020, the proposed regulatory fee schedule for the fiscal year 2020 has duly been released — although the door has been left open (thanks due apparently to the FCC chairman) for those wanting to express their thoughts on the proposed regulatory fees for FY 2020.

Those proposed fees were released as part of a Notice of Proposed Rulemaking that proposes to collect $339 million in FCC regulatory fees for fiscal year 2020 — the exact same amount that the commission proposed to collect in FY 2019.

Each year the commission is required by Congress to assess fees to cover direct costs, indirect costs and support costs. These regulatory fees also cover costs for entities that are exempt from paying regulatory fees (like amateur radio operators and noncommercial radio) and entities whose regulatory fees are waived.

But 2020 has been a year unlike any other.

Discussions about the FY2020 fee schedule have been in the headlines for months, with attorneys and state agencies pressing the commission to consider the impact of regulatory fees on media companies.

Radio stations can expect two key items when reviewing this year’s proposal. One is a familiar regulatory fee schedule where fees are broken down based on media classification and size of the population that the station serves. The other is that proposed fees for 2020 are either exactly the same or slightly higher than the fees collected in 2019, with some fee hikes only $25 higher year over year.

At one end of the spectrum are proposed fees for an AM Class C radio station that reaches less than 25,000 listeners. The proposed fee for that station type in 2020 is $620 — exactly the same amount as it was in fiscal year 2019.

At the higher end — specifically an FM station with certain Class B or Class C definitions that serves more than 6 million listeners — the proposed regulatory fees will be $21,375, which is $875 higher than the 2019 regulatory fee of $20,500.

(See the chart for the proposed fees for FY2020 for all classes of stations, which can also be found on page 42 of the NPRM).

[Read: Hayes Urges FCC Not to Collect Mass Media Regulatory Fees This Year]

Earlier this year, attorney Richard Hayes told Radio World that in his 37 years as a communications attorney he’d never witnessed anything like the “almost-total business shut-down occasioned by the coronavirus. This crisis is an existential one for many broadcasters.” Hayes pressed Congress to request that the FCC suspend the collection of the 2020 mass media regulatory fees outright to help stations struggling from complications related to the COVID-19 pandemic.

Similar concerns were expressed by the New Jersey Broadcasters Association, which called on the commission to hold off on any regulatory fee increases. President and CEO Paul Rotella said that an increase in annual fees for broadcasters is not warranted. “[T]his is certainly not the appropriate time to put any further financial burdens on broadcasters,” he said in a letter to the commission.

[Read: “This Is Not the Time to Raise Fees”]

NAB President and CEO Gordon Smith was blunt about the struggles that broadcasters are facing — from taking out loans to make payroll to cutting staff — during the virtual opening of the 2020 National Association of Broadcasters Show on May 13.

In a subsequent online conversation with FCC Chairman Ajit Pai, even the chairman himself said the commission has been exploring regulatory relief for media companies, including changes to fee structures.

When the NPRM was released, FCC Commissioner Michael O’Rielly issued a statement saying that he sympathized with those who have filed comments opposing increased fees. He also thanked Chairman Pai for including questions in the FY2020 fee proposal to allow commenters to offer suggestions for mitigating the burden of regulatory fees during the pandemic.

“Determining regulatory fees is a somewhat delicate matter, with the need to balance statutory requirements and constraints with the realities of the marketplace, where increasingly higher fees continue to squeeze licensees,” he said. “At the same time, we need to do our part to meet the requirements set in place by Congress, while being mindful of how federal spending affects our licensees and seeking ways to keep costs down within our own operations.”

Comments on the FCC’s proposed regulatory fees can be left in the FCC electronic comment database using Docket 20-105. The comment deadline is June 12.