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Vs Penalized in New FCC Regulatory Fee Structure
7/28/2011


The FCC released the Report and Order (FCC 11-114) last Friday, which established the regulatory fees FCC licensees must pay this year. When the proposed fees were released a few weeks ago, I pointed out the huge discrepancy between VHF and UHF full power stations. The FCC maintained this VHF penalty in the final fee Order.

In the top 10 markets, VHF stations pay almost $50,000 more than UHF operations, or almost 2.5 times as much.

In last year's Regulatory Fee Report and Order the FCC said it will "further examine the nature and extent of all changes that need to be made to our regulatory fee schedule and calculations..."

While the changes were not implemented this year, this new Report and Order said "the Commission will, by the end of calendar year 2011, initiate a further rulemaking that will update the record on regulatory fee rebalancing, as well as expand this inquiry to include new issues and services not covered by the 2008 Further Notice of Proposed Rulemaking, such as whether and how to re-assess the regulatory fee burden of all fee categories."

The large difference between VHF and UHF fees will make them difficult to rebalance, as UHF fees will have to increase to cover a reduction in VHF fees. If UHF and VHF stations in the top 10 markets were assessed the same fees, each would have to pay $42,165 to provide the same expected FY 2011 revenue from those markets. While this represents an increase of less than $8,000 per top 10 market UHF station, a VHF station's fee would be half the $84,619 due under the current structure due to the much larger number of UHF stations sharing the cost.

Delaying the changes in the fee structure to 2012, for licenses held on Oct. 1, 2011 will also give the FCC an opportunity to use the 2010 census data when calculating fees. It will be interesting to see what the Commission does.

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