Annual FCC Regulatory Fees Due September 26, 2017
Kelley Drye Client Advisory
September 8, 2017
Please be reminded of the upcoming filing listed below:
 

Annual FCC Regulatory Fees

Most Federal Communications Commission (FCC or Commission) licensees and other regulated entities must pay regulatory fees annually to offset costs associated with the FCC’s enforcement, public service, international, policy, and rulemaking activities.  Fee amounts change each year and vary by type of activity.  On September 5, 2017, the FCC released a Public Notice announcing a payment deadline for annual regulatory fees of no later than 11:59 PM Eastern Daylight Time on September 26, 2017.  Although the regulatory fees will not officially become effective until published in the Federal Register, entities that are required to pay fees have discretion to submit payments at any time before the deadline. 

The Commission will not issue bills for the regulatory fees and it is the licensee's responsibility to determine the fees owed (regardless of the amount posted on the Fee Filer system). 
 

Regulatory Fees

As noted in the Commission’s Assessment and Collection of Regulatory Fees for Fiscal Year 2017 Report and Order released on September 5, 2017, for FY 2017, the FCC has assessed and plans to collect a total of $356 million in regulatory fees.  The Commission calculates regulatory fees by first determining the number of full time employees (FTEs) who perform the regulatory activities specified in section 9(a) of the Communications Act.  These employees, or FTEs, are categorized as either “direct” or “indirect.”  “Direct” FTEs are employees who perform regulatory activities in one of the “core” bureaus (i.e. the Wireless Telecommunications Bureau, Media Bureau, Wireline Competition Bureau, and part of the International Bureau).

Information about several of the fee categories is included below and fact sheets detailing the types of fees, fee codes, payment methods and options for all regulatory fees can be found on the FCC’s website.
 
  • Telecommunications Service Providers.  The Interstate Telecommunications Service Provider (ITSP) Fee must be paid by most telephone providers, including VoIP providers and audio bridging providers.  The ITSP regulatory fee is based on end user telecommunications revenues reported on the 2017 FCC Form 499-A and this fee has decreased to $.00302 per assessable revenue dollar for FY 2017 (compared to $.00371 for FY 2016).
    • Responsible organizations (“RespOrgs”) with toll free numbers must pay regulatory fees based on their toll free number count.  For FY 2017, the toll free number fee has increased slightly to $0.13, up from $0.12 for FY 2016.   Due to difficulties in determining which toll free numbers held by non-U.S. RespOrgs are accessible in the U.S., the FCC has determined that non-U.S. RespOrgs will not be subject to the toll free number fee in FY 2017.  The Commission noted that the fee for non-U.S. RespOrgs may be reinstated in the future.
 
  • Licensed CMRS Providers.  Licensed commercial mobile radio service (CMRS) providers must pay annual regulatory fees for each license held as of October 1, 2016 even if the license expired after that date.  If the license was transferred or assigned after October 1, 2016, the fee is owed by the party holding the license as of the regulatory fee due date.  CMRS fees are based on the licensee's number of subscribers or telephone number counts as of December 31, 2016.  CMRS cellular radio and mobile service providers will pay $0.21 per subscriber or telephone number, up from $0.20 for FY 2016, while CMRS messaging service providers experienced no rate change and will pay $0.08 per subscriber or telephone number.
 
  • Submarine Cable Operators/International Bearer Circuits.  Regulatory fees for submarine cable systems are paid on a per cable landing license basis for all submarine cable systems operating as of December 31, 2016.  For regulatory fee purposes, the allocation in FY 2017 will remain at 87.6 percent for submarine cable and 12.4 percent for satellite/terrestrial facilities.  However, the Commission increased the fees for cable systems to reflect the reallocation of FTEs.  Information regarding the fees can be found on the FCC's website.
    • International Bearer Circuits remain subject to a fee of $.03 per active (used or leased) 64 KB circuit or equivalent. 
 

De Minimis Exemption Threshold Increased

Under the Commission’s de minimis exemption, those entities whose annual regulatory fees, across all fee categories, total $1,000 or less, are exempt from paying FY 2017 fees.  This amount reflects an increase from the previous de minimis threshold of $500.  The new de minimis threshold does not apply to multi-year filings.  Entities are responsible for evaluating their fee liability each year to determine if the entity still qualifies for the de minimis exemption and must be prepared to provide supporting documentation to the Commission upon request. 
 

Payment Methods and Late Payment Penalties

As a reminder, fees not paid by the due date are subject to a mandatory 25% late payment penalty and delinquent payors are subject to Red Light status.  The Commission also imposes administrative processing charges and interest on delinquent fees.  The FCC does not waive late payment penalties. 

All licensees and regulatees must utilize the FCC's Fee Filer system to coordinate paying any fees.  Fee Filer is now available for viewing and payment of 2017 regulatory fees and it can be found at https://apps.fcc.gov/FeeFiler/login.cfm.  Payors must pay online by credit card, Automated Clearing House (ACH) payment or wire transfer – the Commission does not accept payment via check, cashier check or money order.  Credit card payments to federal agencies are limited to $24,999.99 and transactions, including single payments or bundled payments of multiple bills, greater than $24,999.99 will be rejected.  Payment must be received by the Commission by the 11:59 PM EDT September 26, 2017 deadline.
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Please be advised that attorneys in Kelley Drye & Warren’s Telecommunications Practice Group are experienced in addressing Federal Communications Commission reporting issues and are able to assist clients in paying regulatory fees.  For information on the fee amount applicable to your company, please feel free to contact us or visit our blog at www.commlawmonitor.com/.
 
For further information on any of these filings, please contact Steve Augustino at (202) 342-8612, Denise Smith at (202) 342-8614 or your usual Kelley Drye attorney.