FCC PROPOSES TO COLLECT $273 MILLION IN REGULATORY FEES FOR 2004

The FCC proposed to collect $272,958,000 in regulatory fees for FY 2004 to recover the regulatory costs associated with the Commission’s enforcement, policy and rulemaking, user information and international activities. Last year, it said it would collect $269 million through the assessment. Comments are due April 21, replies April 30.

To calculate revenue amounts for fee categories, the agency said it adjusted each upward 1.5% from the FY 2003 revenue base. It said it further adjusted the FY 2003 list of payment units based on licensee databases and industry and trade group projections. With regulatory fees for AM and FM radio stations, the Commission said it considered additional factors, such as facility attributes and the population served by the radio station.

The FCC said it created a separate local multipoint distribution service (LDMS) fee category. The Commission last year asked for comment on possibly reclassifying for fee purposes LMDS, whose regulatory fees at that time were assessed in the multipoint distribution service (MDS) category (CD March 27 p7). But it said Mon. it declined to place LDMS in the microwave fee category because “recent technological developments and emerging commercial applications suggested that LMDS may develop on a different track than other microwave services.” The Commission noted, however, that it still had under advisement a broader proceeding addressing the policies and fee structures governing LMDS and other wireless services. It said it again asked for comment on the appropriate fee classification of LMDS.

The FCC proposed to keep the commercial mobile radio service (CMRS) messaging subscriber regulatory fee rate at the FY 2003 level to “avoid further contribution to the financial hardships associated with a declining subscriber base.” It said the number of CMRS messaging units declined 51.7% to 19.7 million in FY 2003 from FY 1997. In the FY 2003 regulatory fee cycle, it said the number of CMRS messaging units paying regulatory fees declined to less than 16 million, and “there were no significant changes in the level of regulatory oversight for this fee category.”

The FCC proposed to modify its payment unit assessment methodology and its fee collection procedures for the cable industry. It said it proposed to assess regulatory fees for individual cable operators based on cable subscriber counts that the operators themselves had reported in publicly available data sources, such as the Broadcasting & Cable Yearbook 2003-2004 and the industry statistics published by the NCTA. Under the new methodology, the FCC said cable operators and multiple system operators (MSOs) would base their regulatory fee obligations on their respective basic subscriber counts, and would only have to report their aggregate subscriber count, rather than the counts for every community unit identifier they served. It also said the per- subscriber regulatory fee would remain the same for all cable operators, regardless of company or system size. Beginning this year, the FCC said it would also set a “de minimis payment exemption” for operators serving less than 250 basic service subscribers throughout their systems.

The FCC said the proposed assessment methodology for the cable subscriber service category would reduce “administrative burdens” both for cable operators and the agency, and would “provide predictability… The precise fee obligations of cable operators and MSOs would be easily determined and would be known well in advance by both the regulatees and the Commission.” The agency asked for comment on the feasibility of the assessment proposal, as well as on: (1) The accuracy of basic subscriber counts. (2) Alternative data sources with a high degree of reliability.

Similar to last year, the FCC proposed that it wouldn’t disseminate public notices about fee due dates though surface mail, but rather would provide the information on its website. But the agency still proposed to disseminate fee- assessment notifications to media services and satellite space station licensees, interstate telecom service providers, cable TV system and CMRS operators by surface mail. It said that was required because those licensees “experienced confusion about fees and the fee-collection process in the past, or are likely to need to respond to changed collection practices in the future.”

Beginning this year, the FCC proposed to mail assessments to CMRS cellular and mobile service providers using information in the Numbering Resource Utilization Forecast report. It asked for comment on the use of such data and on other data sources it could use to calculate wireless cellular/mobile regulatory fees.

To streamline the regulatory fee assessment and collection process, the FCC asked for comment on: (1) The process for notifying licensees about changes in the annual regulatory fee schedule. (2) The most effective way to disseminate regulatory fee assessments and bills. (3) The fee payment process. (4) The timing of fee payments.