NAB Urges Fee Shift to Wireless Due to Auction; CTIA Opposes Wireline Fee Shift

The NAB said some broadcast regulatory fees should be reassigned to wireless carriers to reflect the expected spectrum transfer between sectors from the upcoming incentive auction. “The only equitable approach is for the regulatory fees to ‘follow the spectrum.’ The spectrum to be repurposed through the incentive auction will benefit wireless service providers,” said the NAB in comments as industry parties responded to an FCC Further NPRM in docket 15-121 this week (replies are due Dec. 7). CTIA didn’t address the possible broadcast fee shift in its written comments and had no comment to us Tuesday.

CTIA did oppose ITTA proposals to shift some FCC Wireline Bureau regulatory fees to other sectors. CTIA called the proposals “unnecessary and unsupported” by analysis. The ITTA said the shift was needed to reflect bureau work benefiting other sectors, especially wireless, and thereby reduce the "disproportionate" wireline regulatory fee burden. The American Cable Association, which backed the ITTA proposals, also said the bureau’s work supports other sectors, “and accordingly these burdens should be distributed in a fair and equitable and competitively neutral manner.”

The FCC included the Further NPRM in a Sept. 2 item with an order approving the assessment of $339.8 million in regulatory fees for FY 2015 on communications licensees to pay for regulatory costs under Section 9 of the Communications Act (see 1509020026). The notice sought comment on various proposals to modify broadcaster fees, including -- in response to NAB realignment suggestions -- on “whether, when, and how" TV station fees should be adjusted, given the incentive auction scheduled to begin March 29.

NAB said the FCC must realign the fees among TV stations, wireless broadband providers and others to reflect the changes flowing from the auction. NAB said there were 1,784 full-power TV stations and another 399 Class A stations. “According to the Commission’s own repacking simulations, more than 200 television stations will relinquish their channels in an auction that clears 84 MHz of spectrum, and an auction that clears 120 MHz of spectrum would mean that more than 400 stations will relinquish their channels,” the group said. "Such a restructuring would have a corresponding impact on regulatory fees imposed on television stations remaining after the auction, as the regulatory fee process is essentially a 'zero-sum' proposition,” the NAB added. “A reduction in the number of payers in one fee category will increase the share of other payers in that category. Thus, absent Commission steps to correct the regulatory fees going-forward, the departure of 200 to 400 or more television stations will cause an alarming increase in regulatory fees for the remaining stations.”

CTIA opposed the ITTA proposals to transfer some Wireline Bureau full-time employee (FTE) costs to non-wireline licensees. CTIA said ITTA had been proposing since 2008 to force mobile carriers to cover some of the interstate telecom service provider (ITSP) fees paid by wireline carriers. “The Notice raises ITTA’s proposal yet again, and again there is no new information to justify shoehorning wireless voice in the wireline ITSP regulatory fee category, or any details on how this could be accomplished fairly,” the wireless group said.

“ITTA’s proposals repeatedly attempt to shift some of the regulatory fee burden away from [Wireline Bureau] regulatees and place a disproportionate share of regulatory fees on the regulatees of other core bureaus," CTIA said. "The Commission has previously declined to adopt ITTA’s proposals and should do so again here.” Any fee changes “should be measured and rational, and must not unreasonably affect a particular industry,” CTIA said. “Neither ITTA nor the Notice present any showing that the current regulatory fee structure fails to reflect the work that is conducted by Commission staff who handle wireline and wireless matters,” the group said. “As CTIA has demonstrated previously, the wireless sector already contributes more to the Commission’s budget than any other industry segment given [mobile carrier] regulatory fees and spectrum license auction proceeds.”

ITTA defended its proposals to reallocate the Wireline Bureau FTE costs to reflect work affecting others. The midsize telco group said the wireline sector had “borne a disproportionate regulatory fee burden relative to other industry sectors for more than a decade,” making the proposed changes long overdue. “ITSP regulatory fees account for nearly $128 million, or almost 40%, of the FCC’s approximately $340 million total annual regulatory fee revenue requirement, which continues to be more than any other industry sector regulated by the Commission,” the group said.

ITTA said there's clear precedent for shifting some ITSP regulatory fees to others, but it recognized there could be other solutions. “We find reasonable the Commission’s alternative proposal to analyze Wireline Bureau FTEs, as it has done for other bureaus, and reassign or create a new fee category for certain ... FTEs to reflect that the work of those employees is not narrowly limited to the regulation and oversight of ITSPs,” the association said.

ITTA said even a cursory look at the work of 172 Wireline Bureau FTEs raised questions about how the fees are allocated. The bureau has devoted heavy resources to overhauling its USF support mechanisms for rural high-cost areas, Lifeline low-income consumers, school and library E-rate discounts and rural healthcare programs, ITTA said, noting cross-sector fallout. There are many other wireline proceedings affecting others, “particularly wireless carriers, including number portability, 911 emergency access, special access, rate integration, customer proprietary network information, pole attachments, and CALEA [Communications Assistance for Law Enforcement Act],” ITTA said. "Given that these and other [Wireline Bureau] programs and proceedings ... generate significant benefits and obligations for entities that do not pay regulatory fees as ITSPs, the Commission should adjust its fee structure to properly account for this industry crossover.”

ACA said it believes the commission has authority to reallocate the Wireline Bureau regulatory costs as proposed by ITTA. “This is especially the case because Bureau FTEs are engaging in identifiable activities involving" and benefiting wireless providers, said the group representing small cable companies.