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NAB Invests Face Time Fighting FCC Fee Methodology

Association continues to challenge the way the commission allocates fee burden

The National Association of Broadcasters continues to press its case that the way the FCC calculates fees is broken and that radio and TV broadcasters are paying millions of dollars in unfair costs as a result.

Several NAB officials including its chief legal officer met twice via teleconference this month with representatives of the FCC Office of the Managing Director, according to an ex parte filing. The NAB has also made presentations to staffs of the individual commissioners.

The FCC is required to make sure that fees reflect benefits provided to the payor by the commission’s activities. But the NAB has criticized the FCC for reclassifying several dozen “full-time equivalent” positions in its Wireline Competition Bureau in 2017. Those positions work on Universal Service Fund programs but the FCC’s action distributed their costs across all fee categories.

“As a result, broadcasters not only became responsible for nearly 20% of these unrelated costs, but also as a result were required to pay a larger percentage of all commission indirect costs,” NAB wrote in a summary of the recent presentations.

NAB said it was pleased that the FCC, in a notice of proposed rulemaking issued this spring, is “actively reconsidering and seeking comment” on this outcome.

The association told commission officials that broadcasters don’t benefit from the FCC’s USF activities. And they said that the reclassification resulted in an “unlawful” fee assessment.

“Rather than require WCB to bear the full costs of FTEs that plainly benefit WCB regulatees, the commission unlawfully (and only implicitly) decided that it would be better to require broadcasters to pay for nearly 20% of the costs, despite receiving no benefits whatsoever. Not only does the decision defy logic, it is also a flagrant violation of the statute.”

The assessment is also unfair and inaccurate, NAB continued.

“[B]roadcasters’ fees went up by 10% (more than $5 million) to pay for FTEs that the commission acknowledged do not benefit broadcasters.” And because the FCC allocates fees based on a percentage of direct FTEs in each bureau, removing positions from WCB also substantially increased the relative percentage of direct FTEs in the Media Bureau, “thereby also forcing broadcasters to pay for a greater portion of the rest of the commission’s indirect costs.”

NAB calculates that broadcasters have already paid more than $25 million in unwarranted fees as a result of the faulty reclassification and should not be forced to pay more than $6.5 million in additional fees this year.

NAB has proposed an adjustment to the FCC calculation method that it says would be both legal and fair.

However, even if the FCC upholds that particular reclassification decision, NAB wrote, “the commission must in turn reclassify as indirect the 84 FTEs in the Media Bureau that the commission has represented to Congress are working to pursue a 100% broadband policy. The commission just last year acknowledged that broadcasters are not regulated by, nor benefit from the commission’s broadband activities.”