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FCC Releases Guidance on Requests for Fee Flexibility

The bar is still high but the commission streamlined and loosened requirements

The author is with law firm Fletcher, Heald and Hildreth, on whose blog this article originally appeared.

On Sept. 4, 2020, the Federal Communications Commission released a Public Notice laying out the procedures governing the filing of requests for waiver, reduction, deferral, and installment payment plans for the 2020 regulatory fees.

As we explained in a blog post regarding the Federal Communications Commission’s Report and Order announcing the 2020 regulatory fee methodologies, in light of the COVID-19 pandemic the Commission has streamlined its procedures for requests for relief due to financial hardship.

[Related: “Radio Stations Get Little Relief on FCC Fees”]

Unfortunately, while filing for relief is easier, it appears that the bar remains high in order for regulatees to receive relief from their regulatory fee obligations. On the other hand, the Commission has lowered the bar for getting an installment plan and has waived the usual 10% down payment requirement.

Requests for waiver, reduction and deferral for financial hardship

As in past years, a request for waiver, reduction, or deferral of the 2020 regulatory fees based on financial hardship must be filed on or before the regulatory fee payment deadline – Sept. 25, 2020.

The request must be accompanied by (1) either full payment of the regulatee’s 2020 regulatory fee amount or a request to defer payment; and (2) financial documentation demonstrating the financial hardship of the regulatee.  In order to demonstrate financial hardship sufficient to justify the request, the regulatee must show that it lacks sufficient funds to pay its 2020 regulatory fees in full while maintaining service to the public.

Generally, financial documentation sufficient for grant of such requests include:  tax returns, a balance sheet and a profit and loss statement (audited if possible), 12-month cash flow projections, and a list of officers and highest paid individual employees with each person’s compensation.  In light of the pandemic, the Commission is loosening its interpretation of financial documentation and is also accepting banking and investment audit records, accounting ledgers and journals, and loan documents – including balances owed.

For individual regulatees (as opposed to businesses), the Commission is now accepting: wage statements; documents demonstrating non-wage income; real estate valuations and mortgage documents; bank, credit card, and loan statements; account numbers and balances for all cash accounts and investments; and monthly income and expense summaries.

As in the past, waiver requests will be reviewed on a case-by-case basis and only granted where extraordinary circumstances warrant relief. The FCC has been exceedingly stingy in recent years, rarely, if ever, granting relief. We shall see if the pandemic creates sufficient circumstance to soften that position.

Requests for installment payment plans

Requests for installment payment plans for 2020 regulatory fees also must be filed by Sept. 25.  Such requests must include financial documentation sufficient to demonstrate that the regulatee cannot pay its 2020 regulatory fees in full by the deadline.  The Commission will work with regulatees on a case-by-case basis to determine what financial documentation is necessary to file such requests.

The Commission, however, will not grant installment payment plan requests unless the regulatee:  (1) executes an installment payment agreement; and (2) resolves all outstanding debt to the FCC – which may include:  full payment of the debt, payment of a reduced amount, curing all defaults under existing installment payment plans, and/or combining existing installment debt into the 2020 regulatory fee installment payment plan.  For granted installment payment plan requests, the FCC will ease its typical payment terms, including the reduction of the installment interest rate and waiver of the 10% down payment requirement.

Red Light Rule waiver

As we discussed in a previous article regarding the 2020 Regulatory Fee Report and Order, the Commission is waiving its “red light rule” to permit regulatees owning money to the FCC to file requests for waiver, reduction, deferral, and installment payment plans for 2020 regulatory fees.  In the Public Notice, however, the Commission notes that the waiver of the red light rule is limited to requests filed on the basis of financial hardship and installment payment plan requests – requests for waiver, reduction, and deferral filed on a basis other than financial hardship by regulatees on “red light” will be dismissed.

In order to grant appropriate requests for relief from 2020 regulatory fees for regulatees on “red light”, the regulatee must satisfactorily resolve all outstanding debt to the Commission – which may include:  full payment of the debt, payment of a reduced amount, curing all defaults under existing installment payment plans, and/or combining existing installment debt into the 2020 regulatory fee installment payment plan.

Filing of requests

All requests for relief from 2020 regulatory fee obligations may be combined into a single request and filed via email, along with the necessary supporting documents, to the following email address:  2020regfeerelief@fcc.gov.

Should you have any questions regarding requests for waiver, reduction, deferral, or installment payment plans for 2020 regulatory fees – or wish to make such a request – please contact your attorney.

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