Significant increases across-the-board for broadcasters; no announced deadline for fee payments yet, but indications are that they will be due sometime in “the middle of September”

The final 2013 regulatory fees have been announced by the Commission.  For those of you anxious to cut to the chase, here’s a link to a convenient table setting out new fees (and, for TV-related services, comparing (a) the fees the FCC has now adopted against (b) last year’s fees). But before you head on out to the table, you might want to brace yourself – this year’s fees are, with very limited exceptions, a lot steeper than last year’s.

How much steeper? About 7.5% across-the-board on the TV side – which, for a VHF TV station in one of the top ten markets translates to an impressive $6,000 bump up. For radio, the increases tend to be more in the 5% range – preferable to 7.5%, for sure, but still likely to sting a bit.

The relative uniformity in the fee increases over last year should not be a surprise. As we reported last May, when the FCC first proposed this year’s fees, the Commission is re-jiggering the cost allocation method underlying the annual calculation of fees. That re-jiggering means serious upticks for some services, including broadcasting. In fact, the anticipated increases were so serious that, to cushion the initial blow, last May the Commission was contemplating capping increases at 7.5%. And that’s just what it’s done. (For a somewhat more detailed discussion of the allocation method that has led to the increases, see our previous posts here and here.)

The Commission has not yet announced the dates of the window period during which reg fees can be filed this year, but it does say (in Paragraph 1 of its order) that these fees “are due in September 2013” and (in Paragraph 56), “payments of the regulatory fees will not actually be due until the middle of September”. So don’t give up your August beach rental, and go on ahead and make plans for a nice Labor Day . . . but look for a hectic week or two when you get back.

In addition to the fees themselves – and the cost allocation method underlying them – the Commission has announced a number of reg fee-related changes that will kick in next year. So while we need not worry about these changes for this year’s filing, heads up for next year. Those changes include:

  • VHF and UHF stations will be merged into a consolidated reg fee category (although the consolidated VHF/UHF fee category will presumably still include differing tiers according to market size);
  • Internet protocol TV (IPTV) licensees will be subject to reg fees (the new IPTV category will be included in a new fee category along with cable TV);
  • Reg fees for FY 2014 (i.e., those that will be paid next year) will have to be paid electronically; and
  • The Commission plans to transfer unpaid reg fees to the Department of the Treasury for collection at the end of the payment period, rather than 180 days after the close of the payment period, as is its present practice.

With respect to that last point – shipping unpaid fees to Treasury for collection sooner rather than later – the FCC advises that regulatees “will not likely see any substantial change in the current procedures of how past due debts are to be paid”. That, of course, remains to be seen.

With respect to TV translator, LPTV and Class A TV and TV booster stations, the Commission will continue charging only one fee per station, even if the station is transmitting both an analog and a digital signal. This is a hold-over from pre-transition days, and will be re-visited in future years as any remaining analog operations switch over to digital-only.

As has always been the case, failure to pay reg fees on time can have dire consequences. Those include: a late payment penalty of 25 percent of the unpaid amount, starting immediately after the deadline; additional processing charges for collection of late fees; and administrative penalties, such as withholding of action on any applications from delinquent parties, eventual dismissal of such applications, and even possible revocation proceedings. 

Remember, the FCC will not be sending you a hard-copy reminder of your reg fee bill.

And here’s our standard final cautionary heads up: Historically, the FCC’s fee calculator has NOT included fees for any auxiliary licenses that may be associated with the main license.  (We’ve told you about this in the past . . . and it’s still true.)  Since separate fees are due for those auxiliaries over and above the main license reg fee, it’s very important to doublecheck your records and the FCC’s records to be sure that your payment includes the necessary fees for all applicable authorizations. Since a failure to pay even a single $10 fee for a remote pickup could result in the dreaded red light status, extreme care should be taken on this front.

The Report and Order announcing the 2013 fees will technically take effect once it is published in the Federal Register, which we expect to happen in the very near term. As indicated above, the precise dates during which reg fees will be payable have not yet been set (although we do know that those dates are likely to be sometime in “the middle of September”). Check back here for updates.