The proposal to increase annual regulatory fees on radio stations by 4% to 5% in 2020 may have seemed like a good idea when the proposal was being drafted earlier this year. But Colorado Broadcasters Association President Justin Sasso says considering where things now stand, the Federal Communications Commission should reconsider its proposal and “do its part” to alleviate some of the financial stress that broadcasters are suffering.
“While the increase may have been rational in a pre-pandemic era, it only serves to further hinder the ability of these cash-strapped broadcast operations,” said Sasso in a letter to FCC Chair Ajit Pai. “Furthermore, 2020 is a license renewal year for Colorado’s broadcasters, adding additional hardship to the already overstrained expense accounts of our broadcasters,” he pointed out.
CBA polled its radio and television station members during the early days of the Colorado shutdown and Sasso said that he was repeatedly told by broadcasters that they were losing as much as three-quarters of their second quarter income. While lockdowns are easing somewhat, he says broadcasters are being forced to cancel community concerts, expos, and festivals, many of which are sponsored. Sasso said that is only adding additional hardship to the already overstrained expense accounts of the state’s broadcasters.
Sasso is a second-generation broadcaster whose father owned stations in Louisiana, and who spent 25 years in radio before joining the Colorado Broadcasters Association. Though hurricanes, 9/11 and other disasters, he said what he’s witnessed happening to radio and TV billings during the past few months has “humbled” him. Some stations, Sasso pointed out, have even opened their airwaves, at no cost, to all businesses in their communities so they could share their modified setups with potential customers. “Broadcasters continue serving their communities and through all of this, broadcasters are losing the only thing that keeps the staff paid, the transmitters humming and the lights on – advertising income,” he told the FCC.
The Commission earlier this month voted to proceed forward with a proposal that, despite the pleas of some broadcasters, would increase the annual fee paid by stations as the FCC looks to collect $33.9 million from radio and other industries it regulates to pay for the agency’s operations. The 2020 fee proposal (MD Docket No. 20-105), would increase the annual fee for FMs with the biggest reach to as much as $21,375. Various other fees, for such things as construction permits, would also be increased.
Other state associations have also weighed in. Last month the New Jersey Broadcasters Association told Pai that the planned increases were ill-timed. “Even if the economy were restored tomorrow, it would take months to generate and invoice sponsor revenue, let alone receive it,” NJBA President Paul Rotella wrote in a letter to the Commission.
But Pai told Inside Radio in April that there are limits to what it can do on its own since, under federal law, the FCC must assess an annual fee on license holders. That reality has led communications attorney Rick Hayes to try to convince members of Congress to embrace a one-year fee moratorium in their next stimulus bill.