The FCC’s process for assessing and collecting regulatory fees continues to draw daggers from the National Association of Broadcasters. The lobbying group says the commission is using a “pin-the-tail-on-the-donkey approach to assessing fees.”
The association has been vocal on this topic for the past few years and seems particularly determined this year, with fees scheduled to go up again.
Its latest effort delved into more specific legal details.
On Aug. 18, NAB General Counsel and Executive VP for Legal and Regulatory Affairs Rick Kaplan met by teleconference with six members of the FCC legal team to review the NAB arguments against the proposed hikes. The commission staff included FCC Acting General Counsel P. Michele Ellison.
The average proposed increase in MD Docket No. 21-190 is about 8 percent, though some stations could see fees jump by as much as 15%.
According to an NAB summary of the “ex parte” meeting, Kaplan said NAB objects to what it considers discrepancies in how the commission sets these fees and specifically argues that the FCC has no right to require broadcasters to contribute to a $33 million broadband mapping fee as directed in the proposal.
The NAB estimates that broadcasters use 0.07% of allotted spectrum but account for at least 16% of the FCC’s entire budget — all while offering a free service to the public.
The commission proposes collecting $374 million from all the industries it regulates. It could act on the proposal within days, given that the new fiscal year begins Oct. 1, according to legal observers, which adds a sense of urgency to broadcaster arguments.
During the recent meeting, NAB again said the FCC proposal ignores a requirement by Congress for the commission “to take into account factors that are reasonably related to the benefits provided to the payor of the fee by the commission’s activities,” as required by the Ray Baum Act of 2018, which states that the “touchstone” for setting fees should be benefits rather than licenses.
NAB also argues that under the Communications Act, the commission “must not only analyze the changes in the number of full-time equivalent employees (FTEs) across the agency, but also must adjust the resulting fees based on the benefits provided to the payor of the fee.”
It continued: “And apart from a very brief discussion of benefits provided in the context of non-geostationary orbit (NGSO) satellite systems, the proposed rulemaking notice setting the regulatory fees for the new fiscal year blows past this obligation as if Congress never mandated it.”
The broadcast group goes on to stake out its argument:
“The error infects the entire Notice, but is particularly acute when considering Congress’s unusual step of earmarking $33 million for broadband mapping beyond the commission’s general appropriation. The Notice’s treatment of the $33 million could not possibly be more violative of the statute.
“First, it makes no attempt to tie which FTEs [full-time equivalent employees] are working on broadband mapping to the fees associated with that project. If it had, it would have recognized that the Media Bureau has no role in the project and therefore Media Bureau regulatees are not responsible for contributing to its overall cost.
“Second, even beyond the first-step FTE examination, had the Notice bothered even acknowledging its benefits provided obligation, it undoubtedly would have concluded that broadcasters should not have to contribute to the $33 million broadband mapping cost because they receive no benefits whatsoever from that effort. The Notice’s failure to exempt broadcasters from that $33 million is a blatant violation of the statute.”
NAB concludes: “It is well past time for the commission to change its unlawful and unjust approach to regulatory fees. At the very least, the commission must exempt broadcasters from contributing to the commission’s broadband mapping efforts.”
The broadcast industry as a whole has been hyper critical of the FCC proposal. All 50 state broadcast associations in comments to the FCC have argued that their industry has been unfairly subsidizing competitors through fees for decades. Broadcasters also argue that the fee hike is unfair coming on the heels of a pandemic, hurt advertising revenue.