FCC Retains Higher Fees for VHF Stations
July 15, 2010
Last Friday the FCC released the Report and Order (FCC 10-123) [PDF] setting the 2010 regulatory fees. When the Notice of Proposed Rulemaking (FCC 10-51) [PDF] on the fees was released earlier this year, I wondered how the commission would handle the VHF analog stations that moved to UHF DTV channels, and also the UHF analog stations that moved to VHF DTV channels. I was surprised to see that the FCC maintained a significantly higher fee for DTV stations transmitting on VHF channels. The difference is dramatic—in the top 10 markets VHF DTV stations will pay $81,550, while UHF DTV stations will pay $32,275. This amounts to 39.6 percent of the VHF fee.
While the FCC might be able to justify the higher fee for the remaining VHF DTV stations (based on its efforts to deal with complaints and resolve the problems with VHF DTV reception), the real reason was to avoid a significant fee increase for UHF DTV stations.
In the Report and Order the FCC said that several "commenters" had been urging that either all full-service U and V stations should be combined into a single fee category, or that a three-tiered fee system should be established for these stations.
The commission notes that in many Nielsen DMAs the number of VHF stations decreased almost 50 percent, "and this in turn will increase the regulatory fee for these categories twofold."
The FCC has recognized that steps must be taken "to mitigate the impact of this shift on television stations still operating on VHF channels."
The FCC was concerned that if it removed the distinction between U and V stations, fees for UHF broadcasters would increase substantially. As a partial step towards a fairer apportioning of fees, the FCC decided to shift the dollar amounts that VHF stations moving to UHF slots would have paid, had they remained VHF, to the UHF fee category. This increased the regulatory fee cost to all UHF stations.
Last year, when the payments were based on stations', analog channels, the VHF fee in the top 10 markets was $77,575, while the UHF fee was $24,250--32 percent of the VHF amount. This year the UHF fee is 39.6 percent of the VHF amount. The FCC said this increase is approximately 18 to 20 percent less than the fee increase that would have resulted from combining UHF and VHF stations into one digital category by market size.
While UHF stations won't be happy with their fare increases, I suspect that VHF broadcasters will be angry that they are being charged a significantly higher (more than double) regulatory fee for what most would now agree is less desirable spectrum.
There were regulatory fee increases in other categories too. Earth station license fees jumped from $210 to $240 per license. LPTV translators, boosters, and Class A TV fees go from $400 to $415. For the 51 to 100 markets, VHF fees increased from $22,950 to $23,750. UHF fees in these markets increased from $7,600 to $11,550. A broadcast auxiliary license regulatory fee remained unchanged at $10 per license.
It will be interesting to see what the FCC does with next year's regulatory fees. Will they combine VHF and UHF stations when calculating fee categories? If it does, VHF DTV stations may actually see their fees decrease, while UHF DTV stations will see a significant increase.