FY2022 Reg Fee Order Reduces Broadcaster Fee Increase
The FCC won’t include funds for indirect full-time equivalents connected with aspects of the USF in calculating broadcaster regulatory fees but rejected many other broadcast proposals for reduced fees, said the FY2022 regulatory fees order and notice of inquiry released Friday. Radio stations that faced a 13% reg fee increase from 2021 will instead have an increase of 7% or 8%, broadcast industry officials said. Commissioners adopted the order unanimously Thursday. “Regulatory fees are not based on a precise allocation of specific employees with certain work assignments each year and instead are based on a higher-level approach,” said the order. Regulatory fees must be collected before the Sept. 30 end of the federal fiscal year.
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The reduced fees for broadcasters is a shift from the initial draft order and original NPRM, FCC and industry officials said (see 2208220051). They said commissioners from both parties pushed for the changes. “NAB is very appreciative of the hard work and thoughtfulness shown by the Commissioners and their staffs to reduce the exorbitant increase broadcasters faced,” said NAB President Curtis LeGeyt in a statement Friday. The FCC declined to comment.
The order excludes broadcasters from funding 38 indirect FTEs in the Wireline Bureau who work on non-high cost programs of the USF, a shift the accompanying NOI calls “a limited correction.” Not charging broadcasters for USF work was a focus of NAB, but the order doesn’t concede on NAB’s other asks: creating new fee or payer categories and exempting broadcasters from funding work on broadband deployment (see 2208100057). It also doesn’t raise the de minimis threshold from $1,000, change the methodologies for calculating fees for submarine cable or small satellites, or fundamentally change how fees for indirect FTEs are allocated -- all revisions other commenters had requested.
“Even if we could calculate indirect FTE time assignments at a granular level with accuracy, using any particular window of time less than the full year would not be accurate for the entire fiscal year,” said the order. “Basing regulatory fees on specific assignments, instead of overall FTE time, would result in significant unplanned shifts in regulatory fees as assignments change over time.”
The accompanying NOI seeks broad comment on the FCC allocation of indirect FTEs. “We seek to more broadly explore these issues outside of the short timeframe necessitated by the annual regulatory fee proceeding,” the NOI says. “The responses we receive will help us determine if there are lines of inquiry worth exploring in order to further revise our methodology.”
The NOI also asks for comment on expanding which bureaus and offices are considered “core bureaus,” since nonauction FTEs in core bureaus are designated as direct, while all other nonauction FTEs are indirect. It also seeks comment on changing the way indirect FTEs feed into regulatory fee calculation, and asks if there are indirect FTEs who should be considered direct FTES. “Should we consider other corrections to our fee calculation methodology, as we did in the Universal Service Fund context?” the NOI asks. It also asks about creating a new category of “intersectional” FTEs, and asks how often the FCC should assess the allocation of FTEs.
Commenters “should recognize that cherry picking certain groups of FTEs from indirect bureaus and offices and reassigning them as direct FTEs” could lead to “a less equitable methodology overall” and achieve “a result inconsistent with their intention of reducing their regulatory fees,” the NOI said.
“We hope the Notice of Inquiry serves as a springboard to a thorough modernization of the FCC's regulatory fee methodology,” said LeGeyt’s statement. “It is no longer good enough to tinker around the edges.”