Money

background with a lot of dollars

If broadcasters are perplexed why the Federal Communications Commission is proposing to hike annual regulatory fees on radio stations by an average 20% just a year after reducing the burden, they have plenty of company. The National Association of Broadcasters has told the Commission that because it has offered no explanation for the “remarkable” increase for its size, it’s nearly impossible for the industry’s trade group to offer any feedback on the proposed assessment.

As Inside Radio has been reporting, under the FCC’s proposed menu of fees, most stations would see a double-digit increase in what they’d have to pay to the FCC. For the biggest FMs in the largest markets, the annual fee would jump to $22,650 compared to $18,880 last year. On the AM dial the FCC has taken a similar approach, proposing the biggest AMs see their annual fee go up to $17,950 from last year’s $15,050. The Notice of Proposed Rulemaking approved by the Commission two weeks ago offered no explanation for why radio’s annual fees would suddenly increase just a year after they were reduced by an average 13% in 2018.

In a letter to the Commission, the NAB says the notice makes no attempt to explain or justify the increase, which it says will bring “an unexpected and substantial burden” for many broadcasters. “To make matters worse, the fee surge comes at a time when the radio industry is losing both audience share and advertising revenues to rapidly expanding digital competitors,” it says.

The puzzled NAB works through several possible reasons in its letter, concluding the reasoning doesn’t back up the proposal. One option is the FCC’s 2019 budget totals $339 million. That’s up 5.2% from the 2018 budget. But the NAB says that’s a smaller percentage than the proposed radio fee hikes. Another possible reason is that a fewer number of stations means those that remain pay more. Yet the reverse is true as the FCC has itself reported the number of commercial stations has increased. NAB also points out the agency has stopped sharing the number of full-time employees working in the Media Bureau dedicated to radio.

“These are only a few examples of the notice’s shortfalls that make it virtually impossible for interested parties to usefully comment,” the NAB says. It is urging the Commission to issue another notice that better explains the proposed fee changes and include updated staffing data so that the industries impacted “can have some level of confidence in the millions of dollars they are being assessed for their regulation.”

Unless there’s a change, the Commission is giving broadcasters until June 7 to file their first round of comments on its proposal. Reply comments will then be due by June 24. By late summer it’s likely to adopt the final order and the fees will be due on or before Oct. 1.

Failure to pay on time not only results in a 25% surcharge, but the FCC is also authorized to revoke a station’s license for failure to pay a regulatory fee. More common, however, are unpaid fees that trigger the “red light rule,” which blocks any applications or other requests filed by a station from being processed.