FCC 375

For a third consecutive year the annual regulatory fees that the Federal Communications Commission proposes to collect from radio stations is going up, and this year’s planned increase is twice that of a year ago. The FCC has proposed to hike annual fees by eight percent in 2021 as it aims to collect $374 million from all the industries it regulates. That is a ten percent increase over last year’s $339 million FCC budget.

The proposal released by the Commission would for the first time charge every radio station a thousand dollars or more. The lowest-power AMs operating in the smallest markets would pay $1,050 this year compared to $975 last year. And the FMs with the most power and in the largest markets would pay $22,650 versus $20, 925 last year. How much other stations are assessed would still depend on the class of the station, whether it is the AM or FM dial, and the size of the market that the station serves. Based on current estimates, the FCC believes it will collect $20.1 million from FM station annual regulatory fees this year, plus another $9.6 million from AM owners.

Any radio station that was on the air or granted a construction permit on or before Oct. 1, 2020 must pay a fee. Noncommercial stations remain exempt from paying annual regulatory fees.

Various other FCC fees will go up six percent if the Commission adopts the proposal as drafted. That includes the charge for an AM construction permit that would increase to $660 – it was $620 last year – while the fee for an FM construction permit would climb from $1,075 to $1,150.

Even as the FCC is proposing to hike the fees on radio, the agency is also proposing extending the temporary measures it adopted last year to help businesses suffering financial hardships because of the pandemic. Those include allowing some payment deferrals at a discounted interest rate, and in some extreme cases, fee waivers.

The proposal (MD Docket No. 21-190) notes, however, that there is a limit to how much the FCC can do under federal law. “We remind commenters that we cannot relax the standard for granting a waiver or deferral of fees, penalties, or other charges for late payment of regulatory fees,” it says. “The Commission may only waive a regulatory fee, penalty or interest if it finds there is good cause for the waiver and that the waiver is in the public interest.”

The FCC in 2017 doubled the threshold for the so-called “de minimis rule” to $1,000—that’s the amount under which a company need not pay a regulatory fee if what they owe falls below the figure. The theory is that the cost of processing small payments results in a net loss to the U.S. Treasury. But the proposed 2021 fees would put every radio station above that $1,000 threshold.

Some Changes Planned

Regulatory fees cover the FCC’s operations including salaries, rent and other overhead. The system is also designed to charge each industry whatever expense it takes for the agency to regulate it. For that reason, the FCC has decided that it has not been charging the satellite industry enough based on the amount of time government workers have been dedicating to the sector. It also created a two-tier approach to the satellite business to only hit the largest operators with the biggest increases.

Among the other changes the FCC has proposed to adopt in the coming year are reworking how satellite television operators AT&T and Dish Networks are charged – it is considering charging them the same per subscriber regulatory fee that cable TV pays. The FCC is also considering streamlining its fee structure for broadcast television to a tiered system similar to what is used for radio. Under the current rules, the agency releases a 50-page document listing every TV station and what they owe.

The FCC projects it will collect a total of $136.1 million from Media Bureau regulated industries like radio and television, covering the costs of 119 full-time employees that work on media issues.

The FCC is essentially self-sufficient with the fees collected going to fund the agency’s annual budget for the fiscal year that begins Oct. 1. Broadcasters must pay their annual fee by Sept. 30 or else face the possibility that any pending application will not be processed. The FCC also has the authority to charge a 25% mandatory late filing fee.

The Commission is taking comments on its proposed 2021 fees through June 3 with reply comments dune by June 18.