FCC Releases FY 2023 Reg. Fee Report and Order and NPRM

On May 5, 2023, the FCC released a Report and Order and Notice of Proposed Rulemaking on the assessment and collection of 2023 regulatory fees.  For fiscal year 2023 (“FY 2023”), the FCC is required to collect $390,192,000 in regulatory fees pursuant to the Communications Act of 1934, as amended, and the FY 2023 Appropriations Act.  For FY 2023, the FCC has undertaken a high-level, comprehensive staff analysis of the work performed by FCC employees and is proposing to increase the allocation of full time equivalent (“FTE”) employees to the licensing bureaus by almost 19%.

Proposed Broadcast Payment Calculations

Regulatory fees must be paid for initial construction permits that were granted on or before October 1, 2022 for AM/FM radio stations, VHF/UHF broadcast television stations, and satellite television stations.  Regulatory fees must be paid for all broadcast facility licenses granted on or before October 1, 2022.

The FCC proposes the following for broadcast regulatory fees:

  • Calculation of Broadcast Television Fees: The FCC proposes to continue to assess fees for full-power broadcast television stations based on the population covered by a full-service broadcast television station’s contour.  The population data is determined using the TVStudy software and the LMS database, based on a station’s projected noise-limited service contour.   The FCC proposes adopting a factor of .7799 of one cent ($.007799) per population served for FY 2023 full-power broadcast television station fees.  Full power television stations’ population data and proposed population-based fees for each station (population multiplied by $.007799) are listed in Appendix G, which begins on page 65.
  • Calculation of Broadcast Radio Fees: The FCC proposes creating an additional lower tier for radio broadcasters to ensure fees are equitably distributed.  The lowest tier, which used to include all stations serving a population of less than or equal to 25,000 is divided into two tiers: 1) <= 10,000, and 2) 10,001 – 25,000.  The remaining populations tier thresholds would stay the same as prior years.  The proposed fees for each population level and class of station can be found in the table on page 33 and on page 56 in Appendix C.

Report and Order

In the Report and Order, the FCC codifies several temporary measures the FCC implemented during the COVID-19 pandemic to simplify the process for filing waiver, deferral, reduction, and installment payment requests for regulatory fees.  Specifically, the FCC revises sections 1.1166 and 1.1914 as follows:

  • Parties seeking multiple forms of regulatory fee relief, including installment payment of their regulatory fees, may file a single pleading in which all requested relief is included
  • Parties may submit their requests electronically by email to [email protected]
  • Parties seeking only installment payment relief to pay debts owed to the FCC, including regulatory fee debt, must submit such requests in writing, electronically by email to [email protected]

Notice of Proposed Rulemaking

In the Notice of Proposed Rulemaking (“NPRM”), the FCC proposes and seeks comment on the collection of $390,192,000 in regulatory fees for FY 2023.  Regulatory fees are allocated based upon the number of FTE employees within the core bureaus and offices and other factors reasonably related to the benefits provided to the payor of the fee.  In making this calculation, the FCC proposes to allocate approximately 63 indirect FTEs from within the Office of Economics and Analysis (“OEA”), the Office of General Counsel (“OGC”), and the Public Safety and Homeland Security Bureau (“PSHSB”) as direct FTEs in a core bureau, based upon the FCC’s determination that their work has primarily involved specific regulatory fee payors in a core bureau.  The FCC has also modified its allocation of indirect FTEs in the Wireline Competition Bureau who worked on non-high cost programs of the Universal Service Fund to remove broadcasters, and apportion the costs associated with these indirect FTEs among all other regulatory fee payors.

Using this calculation, the FCC has determined that that regulatees in the Media Bureau utilize approximately 130 direct FTEs and are accordingly responsible for $125.25 million in regulatory fees (amounting to approximately 32.10% of all fees the FCC must collect).  This is a decrease of approximately $6.39 million from 2022.

The FCC also seeks comment on other measures to provide relief to regulatees, including:

  • Whether to retain the other remaining temporary measures imposed during the COVID-19 pandemic, other than those codified in the Report and Order, including the reduced interest rate and waiving the down payment for installment payments of regulatory fees
  • Whether the FCC should make modifications to its installment payment plan program, including allowing regulatees to begin paying their regulatory fees in installments in advance of the deadline, rather than after the deadline
  • Other forms of assistance

Finally, the FCC seeks comment on new regulatory fee categories and ways to improve its regulatory fee process.

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