DTV-only as of October 1, 2008? This is your lucky fiscal year!

While pre-October 1, 2008, termination of analog operation was clearly the exception rather than the rule, it appears that stations which did shut down their analogs before October 1 are getting a free reg fee ride this year. In looking through the Commission’s recent reg fee order, we noted the following statement relative to DTV operation: “[S]tations that were broadcasting in digital only on October 1, 2008 would not be assessed regulatory fees for their digital license for FY 2009.”  (Stations that were broadcasting in both analog and digital modes as of October 1, 2008, however, will be required to pay regulatory fees, but those fees relate only to the analog operation.)

This exemption is limited: it does not get eligible stations off the hook for other regulatory fees that may be due, such as those for studio-transmitter links, remote pick-ups, satellite earth stations, and the like. Rather, the exemption relates only to the reg fee for the main broadcast license. (Of course, the payment for that license normally represents the lion’s share of the amount due.)

The FCC’s largesse is consistent with its treatment of DTV for the past several years.

Since the issue of DTV versus analog operations (and the reg fees attributable to each) first arose, the reg fees paid by TV stations have been attributable strictly to the analog license. Following that logic, the few new TV stations initially licensed as a digital-only stations have not been required to pay regulatory fees for their DTV licenses.

TV licensees which shut down their analog operations before October 1 should take a close look at the reg fee postcards they receive from the Commission to see whether that early termination was taken into account in determining the fees due. Our guess is that it will not have done so. 

If that’s the case, the next step is not entirely clear. Since the reg fee order clearly indicates that a fee exemption applies, such stations should theoretically be able simply not to pay the reg fee for their main license. However, it would probably be a good idea to round up evidence – and maybe even submit it before the deadline for reg fee payments – to demonstrate that the station was digital-only by October 1, 2008. Otherwise, it may be necessary to go through the dreaded process of demonstrating to the FCC after the fact that no fee or penalty was due. 

In any event, since the Commission could try to assess a 25% late fee if it thinks that the fee was due but not paid, it’s a good idea to take steps beforehand to avoid having to explain your position to the FCC after-the-fact. (Note that late payers may also be subject to other regulatory problems, including the very disadvantageous red-light status and increased upfront payment requirements in FCC auctions.)

The Commission also was quick to point out that regulatory fees for Fiscal Year 2010, which begins this coming October 1, will be imposed on digital licenses. After all, DTV licensees must pay “their share” of regulatory fees once the nationwide transition is complete. In the meantime, eligible stations can enjoy their one-year respite.