WASHINGTON—The FCC is moving forward with the proposed Fiscal Year 2020 regulatory fees that would collect $339 million, despite multiple arguments over different aspects of the plan from both cable operators and broadcasters.

The FCC is required to assess regulatory fees every year as a primary form of support for the commission. In May, the FCC proposed the $339 million total for fees, with an increase in fees for broadcasters as well as an increase in fees for DBS operators, bringing them closer to the fees paid by MVPDs. This latest action approves that proposal.

The FCC is determining the increase in broadcaster regulatory fees by switching up its method for calculating the fees. Previously, full-power TV station fees were based on the Nielsen Designated Market Area groupings. Now, after using a hybrid approach in 2019, the FCC is completely basing fees off of the actual population covered by a station that is calculated at .78 of one cent times population.

Many broadcasters and the NAB were against the proposal of raising broadcasters’ fees, particularly this year as the impact of the COVID-19 pandemic is affecting the bottom line of many stations. 

The increase for DBS fees—from 72 cents per sub to 89 cents per sub—is a continuation of a regulatory fee policy that the FCC has been employing since 2015 that is bringing the annual regulatory fee for direct broadcast satellite operators closer to the level of MVPDs. Both sides of this argument, cable operators and DBS, had issues with this.

NCTA and ACA Connects, on the side of cable operators, wanted the fees to be raised to level with that of MVPDs, but the FCC said that its yearly increase is still a “reasonable” process. For the DBS side, AT&T and Dish sought to stop the fee increases, arguing MVPD issues do not impact them, an idea the FCC rejected.

NAB issued a comment from Senior Vice President of Communications Ann Marie Cumming in response to the FCC's decision:

"NAB believes strongly that the commission's methodology for calculating regulatory fees is deeply flawed and would not survive judicial review. However, we very much appreciate Chairman Pai and his staff correcting certain errors in the proposal's original calculations to result in reduced fees for many radio broadcasters. NAB urges the commission to convene stakeholders to take a closer look at its approach to regulatory fees to ensure that they are fairly and equitably applied for all entities that utilize commission resources." 

The FCC says that all regulatory fees are due in September.

The full Report and Order from the FCC is available online. 

WASHINGTON—Cable operators are calling on the FCC to level the regulatory fee playing field and require satellite operators (DBS) to match their cable fees.

This comes from the latest batch of comments from ACA Connects and NCTA—The Internet & Television Association in response to comments filed by AT&T and Dish opposing the FCC’s proposal to increase their Fiscal Year 2020 DBS regulatory fee by 12 cents per subscriber.

With this particular proposal, ACA and NCTA make the case that DBS providers’ arguments against any raise for this fiscal year are “predictable and remain meritless,” saying the FCC “must again repudiate them.”

In the past, satellite operators’ reg fees were based on per license rather than per sub. However, the FCC decided a half-decade ago that it would begin charging DBS on a per sub basis and raise their fees annually so as to put them on a path toward parity with cable. Cable operators, however, would rather see fees raised to equal levels immediately.

“[T]he commission should assess all MVPDs, including DBS providers, the same regulatory fee to fund the Media Bureau’s activities in FY 2020 and onward,” the comments read. The cable ops argue that there is no reason for the delay other than that the FCC initially adopted the phase-in approach.

To read the full comments from ACA and NCTA, visit the FCC’s ECFS. 

WASHINGTON—The FCC has issued a Report and Order aimed at modernizing the procedures and rules pertaining to the direct broadcast satellite service that is used for satellite TV delivery. This is the first time that the DBS licensing provisions have been updated in more than a decade.

The DBS service provides TV programming directly to consumers via satellites operating in geostationary orbit using the 12.2-12.7 GHz and 17.3-17.8 GHz frequency bands.

With the updated rules, the FCC says that DBS processing procedures will now be more in line with the streamlined processing procedures used for geostationary orbit fixed-satellite service satellites. The commission also believes that it will lead to increased use of spectrum and orbital resources, while also protecting existing consumers of satellite TV from interference to their service.

The Report and Order adopts a process for considering new DBS service applications on a “first come, first served” basis. It also applies the milestone and bond requirements for geostationary orbit fixed-satellite service to DBS services, extends the license term of non-broadcast DBS space stations from 10 to 15 years and ends the “freeze” on applications for DBS licenses.

Chairman Pai and all four FCC commissioners approved the Report and Order on Thursday, Sept. 26.

WASHINGTON—FCC Chairman Ajit Pai announced several initiatives the commission will take up in its next open meeting, scheduled for Sept. 26.

The chairman said he will seek public comment on a proposal to replace the requirement that broadcasters file notices in local newspapers when they file certain applications with the commission and allow them to instead post online notices that would directly link to the applications themselves.

“I am also proposing to simplify the announcements regarding these applications that broadcasters must make over the air, and to have these announcements direct the public to online resources where they can review these applications,” the chairman said in a blog. “This is just another example of how we are modernizing our media rules to reflect the digital age and streamlining them to eliminate unnecessary red tape.”

Also on the agenda is a proposal to extend the commission’s recent efforts to streamline processing procedures for certain satellite to DBS. The commission will also vote to seek comment on draft procedures for an auction of 70 MHz of spectrum in the 3.5 GHz band for 5G, to begin on June 25, 2020. 

MONTEREY, CA–Cable and satellite TV providers continue to shed subscribers as the rate of cord-cutting accelerate in the third quarter, according to several new research reports.

According to MoffettNathanson, more than 1 million viewers severed their subscriptions to cable and satellite TV services in Q3, the most ever in a quarterly earnings period. The four largest U.S. pay-TV providers--AT&T (DirecTV), Comcast, DISH and Charter lost 887,000 subscribers in the quarter, with the satellite TV providers taking the brunt of the loss.

Media Research firm Kagan released similar figures, noting that cable lost 1.1 million subscribers year-to-date so far, their worst performance at the three-quarter mark since 2014. Satellite providers lost 726,000 subscribers in Q3 and traditional telco subscriptions fell by 94,000, with Verizon alone shedding 63,000 subs alone during Q3. The current number of multichannel video program subscribers stands at 91 million, including 88.2 million residential customers, according to Kagan.

Kagan’s quarterly analysis now includes total virtual multichannel subscriptions from services such as Sling TV, DirecTV Now, Hulu with Live TV, YouTube TV and PlayStation Vue. The combined virtual platforms gained an estimated 2.1 million subs in the trailing 9 months, compared a decline of 2.8 million in the traditional segment.

Leichtman Research Group reported a loss of approximately 975,000 subscribers for the pay-TV market in Q3 compared to a pro forma loss of 410,000 in Q3 2017. Among “skinny bundles,” LRG focused on those provided by AT&T/DirecTV and DISH, noting that its Sling TV and DIRECTV NOW services added only 75,000 subscribers in Q3, compared to about 530,000 net adds in Q3 2017. This was the fewest in any quarter since their debut.

Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. noted the danger such trends mean for DBS providers in particular.

“Satellite TV services had more combined net losses in 3Q 2018 than in any previous quarter,” he said. “These net losses were largely driven by corporate strategies focused on acquiring and retaining more profitable subscribers (as well as a programming carriage issue between DISH and Univision). A related emphasis on improving the profitability of the satellite TV company’s Internet-delivered flanker brands reduced net quarterly adds in the segment, resulting in vMVPDs not helping to mitigate overall pay-TV losses to the degree they had in recent quarter

In addition to lost subscription revenues, cord-cutting is hitting pay-TV’s advertising base as well. eMarketer recently downgraded its TV ad revenue estimates for 2018, decreasing the rate of growth to just .5 percent to $71.65 billion, down from the previously estimated $72.72 billion. eMarketer predicts that TV’s share of total media ad spending in the US will drop to 34.9 percent, and is expected to fall below 30 percent by 2021.

WASHINGTON--Noncommercial educational (NCE) TV stations want the FCC to end the mandatory three-year satellite election of most-carry status by noncommercial TV stations, saying it is both unnecessary and that DBS providers have used it as a loophole through which to drop carriage.

That came in comments to the FCC on its ongoing effort to modernize media regs.

In those comments, PBS, NPR, the Corporation for Public Broadcasting and America's Public Television Stations said that given that noncommercial TV stations can't, unlike commercial stations, elect retransmission consent--and obviously want DirecTV and Dish to carry them--the election is simply a rote process.

They point out that there is no similar three-year election for cable carriage, which simply continues indefinitely unless there is a change in circumstance that modifies the must-carry agreement.

"The DBS rules should be aligned with the cable rules to permit a one-time election that continues for as long as the station remains qualified for carriage," they said.

In addition, they argue that, in at least a "handful of cases, each three-year cycle, the requirements "turn out to be a trap for the unwary NCE-TV station, resulting in the loss of DBS carriage in the station’s market for the next three years."

MONTEREY, CA.–Despite increasing uptake rates by so-called “skinny bundles,” cable and satellite operators continue to see declining subscription rates to their main pay-TV services, according to Kagan.

According to the media research Kagan’s Q2 2018 U.S. Multichannel Subscriber Report, cable, direct broadcast satellite (DBS) and telco multichannel sectors combined lost 860,640 video subscribers in the three-month period ended June 30, 2018, ending the quarter at 92.2 million, down from 98 million the same period a year ago.

While the combined total was less than the loss of 976,000 video subscribers during the same quarter a year ago, DBS logged its second largest quarterly decline on record, losing a combined 478,000 customers, while cable logged its largest second-quarter video subscriber drop since 2015, bringing year-to-date losses to 685,790. The telco video segment improved dramatically during the period however, reducing its losses to just 56,000, or just a fraction of the pattern of quarterly losses established in the last two years, according to Kagan.

The picture for pay-TV operators improves, however, when taking their OTT-based “skinny bundles” into account. DIRECTV NOW and DISH’s Sling TV reduced the quarterly subscription losses by approximately 45 percent, raising the residential figure to 93.5 million.

The residential multichannel penetration rate stood at 75% as of June 30 when including the virtual multichannel services owned by AT&T and DISH Network (DIRECTV NOW and Sling TV).

SUT-PJ/CJ series tuner modulesTOKYO—Sony Corp. announced commercialization of a demodulator and tuner set for 4K- and 8K-capable satellite TV transmission standards. Samples will start shipping in September, Sony said.

The demod/tuner pairing is compatible with both DVB- and ISDB-based satellite TV transmission standards, but Sony said it was the first to work with ISDB-S3, the latest satellite version of the digital TV transmission format used in Japan and Brazil as well as several other Asian and South and Central American countries.

Test broadcasting in 4K and 8K over ISDB-S3 is scheduled to commence in Japan in August, and full-scale broadcasting is slated to begin in 2018, the manufacturer said. Going forward, Sony said it would would aggressively promote its new tuner components to TV and set-top box manufacturers who will be interested in incorporating the components into their sets.

ISDB-S3 is said to handle more than twice the amount of data is transmitted compared ISDB-S. Sony said its new CXD2857ER demodulator LSI incorporates proprietary reception algorithms and error correction technology. The LSI also features reduced power consumption.

CXD2857ER demodulator LSI Sony said the ISDB-S3 standard expands the upper limit for reception frequency to 3,224 MHz, from the 2,070 MHz supported by the original version, ISDB-S. Ordinarily, the higher the frequency, the more difficult it becomes to keep the signal level uniform. Sony said its new SUT-PJ/CJ tuner modules achieve stable reception with minimal noise thanks to the CXD2868ER, a newly developed silicon tuner IC featuring proprietary noise-reduction circuitry. Furthermore, this silicon tuner IC, like its predecessor model<, is capable of receiving the three Japanese TV broadcasting signals (terrestrial digital, BS/CS digital) all in one IC. It also retains the same size and power consumption levels as its predecessor, despite supporting BS/CS digital signals at higher frequencies up to 3,224 MHz, Sony said.

Sony will offer its ISDB-S3 compatible products in several different varieties. Sony’s new tuner modules will be available in single, double, and triple silicon tuner IC variations, in order to enable simultaneous recording of multiple channels. Additionally, the demodulator LSI will be sold separately, as well as mounted together with a silicon tuner IC on a tuner module in order to facilitate the design of more compact and thinner TVs and set-top boxes.

Press Release