NAB, CTA Spar Over FCC Fee Structure Reform

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(Image credit: FCC)

WASHINGTON D.C.—In an October 21 filing with the FCC, the National Association of Broadcasters (NAB) has urged the FCC to “continue to reform and modernize its fee structure to bring it into full compliance with the Commission’s statutory mandate” and “expand the base of payors to include broadband providers and Big Tech companies that plainly benefit from Commission activities.”  

In a separate October 21 filing, the Consumer Technology Association (CTA) has opposed those proposals, saying that requiring “unlicensed spectrum users” to “pay regulatory fees is contrary to the Commission’s longstanding approach under Section 9 of the Communications Act” and that the change would be “impossible to implement,” “undermine innovation” and be “counterproductive.” 

The CTA also stressed that its members are already paying fees to the FCC. 

NAB said that the FCC should ensure that the Commission's costs reflect the benefits received by the payors of regulatory fees from Commission activities and expand the base of payors to include broadband providers and Big Tech companies that plainly benefit from Commission activities.

Noting that “the D.C. Circuit has interpreted this statutory mandate to require the Commission to assess fees that take into account ‘benefits provided to the payor of the fee by the Commission’s activities,’” the NAB filing complained (opens in new tab) that the “Commission routinely violates this statutory requirement by basing its fee schedule solely on the number of direct full-time equivalent employees (FTEs) in the four `core’ bureaus of the Commission. The result of this methodology is a fee schedule that reflects only the work performed, and the benefits provided, by a mere quarter of the Commission’s operations. The Commission’s approach is unlawful and unconstitutional because, among other things, it forces broadcasters and others to subsidize Commission activities which substantially benefit other regulatory fee payors or other entities that currently contribute nothing to the Commission’s funding in violation of the law and general federal fee policy.”

To address that problem, the NAB urged the FCC to “fundamentally reassess its proportional allocations of indirect Commission costs to determine whether such allocations align with the actual amount of work performed by the noncore bureaus and offices on behalf of regulatory fee payors” and that “the Commission should perform the analysis necessary to add a fee category for broadband service providers or exempt broadcasters from paying for any broadband costs.”

The filing also argued that “the Commission cannot lawfully turn a blind eye to the fact that Big Tech – companies such as Facebook, Google, Microsoft, and Amazon – take up significant Commission resources under the banner of `unlicensed spectrum,' yet pay no associated regulatory fees as a result.”

Calling the FCC’s failure to reform it’s fee structure a “gross inaccuracy and frankly, laziness,” the NAB complained that “as a result of this flawed methodology, each year broadcasters are responsible for nearly 20% of the costs associated with noncore bureaus and offices including the Consumer and Governmental Affairs Bureau, the Office of Engineering and Technology, the Office of Economics and Analytics, the Office of the Inspector General and the Enforcement Bureau, without any consideration for what amount of the work performed by these offices and bureaus actually relates to the broadcast or any other industry.”

“As NAB has highlighted previously,” the NAB said, “the current regulatory fee system is unfair and unsustainable in part because broadcasters subsidize the costs to the Commission of supporting deep-pocketed technology companies’ business models through proceedings which reduce the ability of licensed broadcasters to serve viewers and listeners.”  

In a October 21 filing (opens in new tab), the Consumer Technology Association opposed those proposals, saying requiring “unlicensed spectrum users” to “pay regulatory fees is contrary to the Commission’s longstanding approach under Section 9 of the Communications Act and adopting it would overturn years of Commission precedent. It also would raise serious administrability concerns, be impossible to implement in a non-arbitrary manner, and have significant implications for regulatory fees in contexts beyond unlicensed spectrum. Further, NAB’s proposal would undermine the enormous innovation made possible by the Commission’s long-running and successful approach to unlicensed spectrum. Finally, NAB’s proposal overlooks that companies using unlicensed spectrum already defray Commission costs in important ways. The Commission should not adopt this unprecedented, counter-productive proposal.”

The CTA filing is available here (opens in new tab)

The NAB filing is here (opens in new tab)

George Winslow is the senior content producer for TV Tech. He has written about the television, media and technology industries for nearly 30 years for such publications as Broadcasting & Cable, Multichannel News and TV Tech. Over the years, he has edited a number of magazines, including Multichannel News International and World Screen, and moderated panels at such major industry events as NAB and MIP TV. He has published two books and dozens of encyclopedia articles on such subjects as the media, New York City history and economics.