FCC Shelves Broadcasters FY21 Reg Fee Increase, Seeks Comment on Fees for Big Tech

“Why in the world would the people who are constantly in front of the FCC, benefiting, not be paying anything?” asked Bob Houghton, president-Georgia Association of Broadcasters. “The fundamental problem” is FCC commissioners need “some jurisdiction over the entities they want to apply the regulatory fees to,” emailed TechFreedom General Counsel Jim Dunstan. The FCC’s action on NGSOs was no surprise, but satellite operators that were opposed haven’t decided next steps, said a satellite company regulatory lawyer active in the proceeding. Opponents might file a petition for reconsideration with the agency, another satellite attorney said. NetChoice, Computer & Communications Industry Association, CTA, Internet Association and TechNet didn't comment.

The 2021 regulatory fees order goes beyond the statutory requirement to collect fees and looks forward to “how we might modernize our regulatory fee policies,” said acting Chairwoman Jessica Rosenworcel in a statement with the order. Commissioner Nathan Simington praised Rosenworcel’s “record of bipartisan leadership.” Commissioner Brendan Carr thanked his colleagues for supporting possible fees for “large technology companies.” In a release, NAB praised the FCC for working to “ensure all stakeholders that benefit from the Commission’s work are paying their fair share and that those currently subsidizing the Commission are no longer paying for work unrelated to their industries.”

The NPRM seeks comment on assessing regulatory fees to big tech companies and unlicensed spectrum users, and “the legal basis” for doing so. Unlicensed spectrum users include “a significant number of equipment manufacturers” that generally don’t require FCC authorization, the NPRM notes. “Should the Commission assess regulatory fees on large technology companies based on a different basis, such as any advantages they receive because of the Commission’s universal service or other activities?” the NPRM asks. It also seeks comment on changing the categories of regulatory fees, and how such changes would fit into the congressional requirement that FCC regulatory fees be connected to the amount of employee time spent on the industry.

The FCC has the authority to apply regulatory fees to unlicensed users and tech companies because of Ray Baum’s Act, which allowed such fees to apply to entities other than licensees that benefit from FCC activities, said Flick. But “for the FCC to pivot now and suddenly start sending bills to edge providers because they ride upon the privately built broadband infrastructure flatly contradicts” the intent of 1996 Telecommunications Act and past precedent, wrote TechFreedom's Dunstan in a Federalist Society blog post Friday.

The argument that any user that benefits from the FCC should pay regulatory fees is a “slippery slope that becomes an instant cliff,” Dunstan wrote. “I benefit from being able to post this article and have people access it across the Internet. Should I now send a dollar to the FCC in regulatory fees?” The amount of money the FCC would charge tech companies and manufacturers would likely be insignificant to them, said Houghton. “It wouldn’t even move their decimal points.”

Tech companies and device makers aren’t likely to quietly agree to pay new regulatory fees, said Fletcher Heald broadcast attorney Frank Montero. They would likely vociferously oppose attempts to extend the FCC’s authority over them, even if the money in question weren’t significant, out of concern that it would lead to further regulation, he said. Flick agreed, but said members of Congress and others seem more open to scrutiny of tech companies than in the past. “Now is as good a time as any,” he said.

Unusual Circumstances

The changes to the order to spare broadcasters a regulatory fee increase are based on “unusual circumstances,” in “this limited instance,” given “the one-time nature” of the $33 million implementation of mapping efforts from the Broadband Data Act, the order said. Broadcasters argued they, alone among industries regulated by the agency, don’t directly benefit from broadband mapping and shouldn't face a fee increase to pay for it. “Making this adjustment to our indirect cost methodology is fair, sustainable, and administrable” in part “because of the unusual position of broadcasters vis-a-vis other Commission regulatees in this instance,” the order said.

The originally proposed fee increase wouldn't likely have been large for individual, smaller broadcasters but would have significantly affected them, said broadcast industry officials. “I’ve been to lunches that cost more than some of those fees, but to a radio broadcaster who has one employee besides himself, it’s a lot,” said Houghton.

Satellite Fees

The order uses 16 paragraphs rejecting objections and criticisms raised by some satellite operators about the two NGSO fee subcategories (see (2108060009). Satellite systems communicating with large numbers of earth stations won’t require more oversight? The ongoing regulatory activities “will be more intensive, because the number of earth stations is an indicator that the space system itself is more complex,” the agency said. Streamlining the NGSO fixed satellite service processing round process means fewer fees should be borne by “other” NGSO systems? The amount of work for application processing is less, but issues such as disputes among authorized operators still “can be time-consuming,” it said. The FCC didn’t have enough evidence to justify the fee allocation? The process for developing the NGSO regulatory fee subcategory proposal “was similar to the process used to determine the allocation of regulatory fees between GSO and NGSO satellite systems,” it said. The order also rejected different fee allocations.

In the accompanying NPRM, the FCC asks questions about different possible methodologies for setting regulatory fees for small-sized satellites, which will be their own category starting with FY 2022.