Despite months of lobbying by broadcasters at the Federal Communications Commission, a proposed 13% hike in annual fees reportedly remains in the agency’s sights. Communications Daily reports the draft order circulated among the four FCC commissioners not only has left the proposed double-digit increase in place, but it also has not reallocated any of the full-time staffers as suggested by broadcasters to make the plan more equitable.
Time is running out for the Commission to adopt the order. Broadcaster are required to pay their annual fees before the new fiscal year begins on October 1. Even so, Communications Daily says the FCC commissioners are expected to make changes to the proposed fee structure. But rather than a fundamental rethinking of how costs are divvied up among the industries as sought by broadcasters, the revisions are more likely to be along the margins.
The FCC is proposing nearly all radio stations pay 13% more than they did a year ago as the agency raises funds to meet its proposed $381.95 million budget for the fiscal year that begins Oct. 1. Under the FCC draft (MD Docket No. 22-223) the biggest FM signals in the largest markets would have a proposed annual fee of $23,585. The biggest AMs in the largest cities would be charged $18,885. The planned rate increase on broadcasters reportedly amounts to nearly the entire $7.95 million expansion of the FCC’s budget.
The National Association of Broadcasters has called the proposal “unfair, unsustainable, and unlawful” because it would require radio and TV stations to pay the costs associated with the Commission’s implementation of the Broadband DATA Act, which is focused on collecting information used to create maps showing where high-speed internet reaches. The NAB has also complained about costs related to the FCC’s Universal Service Fund activities tied to 84 Media Bureau full-timers who work on the agency’s “100% broadband policy.” It says those costs should be redirected to cable and satellite TV providers who benefit from the broadband work.
FCC Chair Jessica Rosenworcel has signaled she was open to bigger changes in the fee structure, and despite this year’s proposal looking similar to past years, she told Inside Radio in May that it remains a topic of discussion. “We have a statuary obligation to come with decisions about regularly fees and we try to make those decisions consistent with precedent,” she said.
The FCC’s plans for broadcasters has not gone unnoticed on Capitol Hill where 92 members of Congress have sent a letter to the FCC expressing their concerns with the plan. The bipartisan group of lawmakers urged the agency to adjust its fee structure to “take into account factors that are reasonably related to the benefits provided to those required to pay the fees.”
Cromwell Group President Bud Walters says he finds it hard to believe the FCC can justify a 13% increase for broadcasters. In a letter to FCC Chair Jessica Rosenworcel this week, Walters says his company paid $65,000 last year in fees and it will go up to $75,000 this year.
“A 13% increase may be allowed by Congress, but I find it very hard to justify,” says Walters. “It comes across as a new tax,” he adds, noting it will be harder on smaller markets that are “vulnerable” to a potential economic slowdown.