Satellite Operators Oppose Cable Industry's Equal Regulatory Fee Idea

“The cable industry finds ‘no evidence’ to justify any meaningful disparity between the two classes of fees. Yet evidence of these differences abounds,” DirecTV said, citing the FCC proposal for different fees and “the far more extensive nature of cable regulation.” While the FCC "has struggled with regulatory-fee accounting issues for years," there's no better evidence available that the fees aren't reflective of DBS and cable regulatory costs "more or less correctly," DirecTV said. The idea of raising the proposed 12-cents-per-customer DBS regulatory fee to match what cable and Internet Protocol TV providers pay “as a matter of ‘fairness’ lack[s]4 legal foundation” and would give DBS providers “rate shock,” Dish said. Absent any changes in the future in how DBS is regulated, Dish said, “the 12 cents should remain … going forward.” Both industries raised similar concerns last year when the FCC previously proposed DBS regulatory fees (see 1412300036).

If the FCC does opt to phase in higher DBS regulatory fees, that phase-in period should at most be three years -- any more being "far beyond the length of any reasonable phase-in period that might be needed to prevent any 'rate shock,'" NCTA and ACA said in their latest comments. They proposed a phase-in of 24 cents per subscriber for 2015, 48 cents for 2016 and 72 cents for 2017, "which ... should reasonably approximate the projected rate paid by cable operators and IPTV providers in that year," they said.

The North American Submarine Cable Association called DBS objections to higher fees “baseless and dilatory” -- especially because submarine cable operators “continue to subsidize satellite-related payers significantly, as they have for years,” the industry group said in comments posted Tuesday. The fight over fee allocation between DBS and earth station operators is a satellite “pretext for continuing subsidies” to DBS licensees, it said. While the FCC looks to receive $5.9 million in International Bureau regulatory fees from submarine cable operators in fiscal 2015, that figure -- based on FCC FTE staff working on submarine regulation -- should be roughly $1.5 million, the industry group said. The fees the submarine cable industry does pay "do not reflect work performed by the Commission to the benefit of submarine cable operators," the Submarine Cable Coalition said in comments posted Tuesday. "The Commission rarely engages in policy activities or rulemakings aimed ... specifically at submarine cable matters. Submarine cable-related dockets and activity make up a very small portion of the Commission’s database information systems, and the Commission rarely, if ever, undertakes activities on behalf of submarine cable operators in international treaty negotiations."

Inmarsat, SES Americom and Telesat Canada filed joint comments posted Tuesday opposing Intelsat raising the idea of assessing regulatory fees on non-U.S.-licensed satellite operators that have U.S. market access -- which EchoStar also has opposed (see 1507060057). If the FCC needs money for the cost of processing applications for domestic access to foreign satellites, it should look at earth station regulatory fees instead, the three said. Since Congress has explicitly said satellite regulatory fees apply only to those licensed by the FCC under Title III, “imposing regulatory fees on foreign satellite operators is beyond the scope of the commission’s powers” and could lead to other nations levying such fees themselves, the three said. Intelsat’s argument that the current regulatory fee system gives a competitive advantage on nondomestic licensees falls flat because foreign licensees typically pay fees at home that U.S. licensees operating there don't, with those costs often more expensive than U.S. regulatory fees, the three said.