Annual FCC Regulatory Fees Due September 24, 2015
Kelley Drye Client Advisory
Please be reminded of the upcoming filing listed below:
Annual FCC Regulatory Fees
Most federal licensees and other regulated entities must pay regulatory fees 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. Regulatory fees must be paid no later than 11:59 PM on September 24, 2015, Eastern Daylight Time. Payers should note that only electronic payment of regulatory fees will be accepted, and payment must be received by the Commission by the date and time above. Failure to meet the payment deadline will result in late payment penalties of 25%. The FCC does not waive late payment penalties.
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). All licensees and regulatees must utilize the FCC’s Fee Filer system to coordinate paying any fees. Fee Filer is now available for payment of 2015 regulatory fees and it can be found here. Payors must pay online, by credit card or wire transfer. The Commission will no longer accept payment via check, cashier check or money order.
Licensees and regulated entities may request waivers, reductions, or deferments of regulatory fees. The Commission grants such requests on a case-by-case basis, and only where good cause is shown and grant of the request would promote the public interest. Licensees requesting a waiver or reduction of regulatory fees must pay the full regulatory fee which will be refunded if the request is granted. If the licensee cannot afford to pay the regulatory fee, it must submit, with the waiver/reduction request, a separate petition, that includes supporting financial documentation, requesting a financial hardship deferral. Waiver/reduction requests submitted without full regulatory fee payment or the separate deferral petition will be dismissed and the FCC will apply the 25% late payment penalty. Waiver requests filed by delinquent debtors will be dismissed as will deferral petitions that do not contain required financial documentation.
The waiver/reduction request and any deferral petition must be received by the Commission by the regulatory fee payment deadline. Waiver/reduction requests that include a deferral petition must be filed with the FCC Secretary’s office and filings sent to other locations or to FCC staff may be dismissed. Note that, if the request is being submitted to the FCC by messenger or hand delivery, the FCC accepts messenger and hand delivered filings only between 8:00 AM and 7:00 PM.
Note that stringent consequences apply for missing the waiver/reduction request and deferral petition filing due date. This may include: dismissal of the waiver/reduction request or deferral petition; the fee payment will be delinquent; the licensee will be placed on red light status; the 25% late payment penalty will be assessed. The licensee will be responsible for payment of the penalty, associated collection charges, interest and additional penalties.
Of particular interest is the Interstate Telecommunications Service Provider Fee (“ITSP”) which must be paid by most companies, including VoIP providers and audio bridging providers. Generally, if a company filed an FCC Form 499-A in April 2015, it will owe FCC regulatory fees. For other regulated entities, including submarine cable licensees, cable TV providers and CMRS providers, please refer to the industry-specific guidance on who must pay, and how much, posted on the Commission website.
New for this Fiscal Year 2015 (FY 2015), the FCC will begin collecting regulatory fees from two new classes of contributors – “Responsible Organizations” (“RespOrgs”), and Direct Broadcast Satellite (“DBS”) providers. Under the 2015 Regulatory Fees Order, the FCC also reduced the fees to be assessed and collected for the submarine cable/terrestrial and satellite bearer circuit (“SBI”) category.
For FY 2015, the FCC has assessed and plans to collect a total of $339,844,000 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). Notably, for FY 2015, the FCC reallocated four International Bureau FTEs from “direct” to “indirect.” This change will likely reduce the fee burden for those entities regulated by the International Bureau.
The Commission also increased the de minimis threshold for regulatory fee obligations to $500. Under the de minimis threshold, those entities that are assessed less than $500 in regulatory fees will be exempt from paying FY 2015 fees.
- RespOrgs. Carrier and non-carrier RespOrgs will be assessed a regulatory fee of 12 cents per toll free number. For non-carrier RespOrgs, this represents the first time that these entities will be assessed regulatory fees. For carrier RespOrgs who are already responsible for ITSP fees, the net effect is likely to be a slight reduction compared to what would have been assessed without the RespOrg fee, as the amount assessed for toll free numbers was taken from the amount to be recovered from ITSPs. In sum, RespOrgs will be responsible for contributing a total of $4,380,000 in regulatory fees and are required to pay regulatory fees on all working, assigned and reserved toll free numbers, including those toll free numbers that are in transit status, or any other status as defined in section 52.103 of the Commission’s rules. Unit counts are based on toll free numbers managed by RespOrgs as of December 31, 2014.
- Direct Broadcast Satellite. In FY 2015, the FCC is assessing and collecting its regulatory fee for DBS providers as a subcategory of the cable television and Internet Protocol Television (IPTV) regulatory fee category, charging DBS providers 12 cents per subscriber, per year. The Commission is imposing the new fee because of the Media Bureau’s increased regulation and oversight of DBS providers since the implementation of the Commercial Advertisement Loudness Mitigation Act (CALM Act), the Twenty-First Century Communications and Video Accessibility Act (CVAA), and the Satellite Television Extension and Localism Act (STELA) Reauthorization Act of 2014 (STELAR). DBS providers are responsible for contributing a total of $4,080,000 in regulatory fees. The regulatory fees are to be paid on a per subscriber basis as of December 14, 2014. If a permit or license was transferred or assigned after October 1, 2014, the holder of the permit or license as of the fee due date (September 24, 2015) will be responsible for payment.
- Submarine Cable Systems. Recognizing the minimal oversight and regulation of the international bearer circuit industry (IBC), the FCC reduced the total regulatory fee apportioned for submarine cable/terrestrial and satellite bearer circuits by 7.5 percent. In sum, submarine cable providers will be responsible for contributing a total of $4,652,576 in regulatory fees but individual fees will vary based on the submarine cable systems’ capacity. Regulatory fees for submarine cable systems are to be paid on a per cable landing license basis, based on circuit capacity as of December 31, 2014. For regulatory fee purposes, the allocation of FY 2015 will remain at 87.6 percent for submarine cable and 12.4 percent for satellite/terrestrial facilities.
- Earth Stations. In FY 2014, the FCC increased the regulatory feeds paid by earth station licensees by nearly 7.5 percent. In the FY 2015 Notice of Proposed Rulemaking, the Commission sought comment on whether it should raise the earth station regulatory fees again and will take comments under advisement for FY 2016. For FY 2015, earth stations will be responsible for contributing a total of $1,023,000 in regulatory fees.
Other Standard Fee Calculations and Payment Dates
- Interstate Telecommunications Service Providers (ITSP). ITSPs will be responsible for paying a total of $128,428,000 in regulatory fees. Wireline services regulatory fees must be paid for authorizations that were granted on or before October 1, 2014. If a permit or license was transferred or assigned after October 1, 2014, the holder of the permit or license as of the fee due date (September 24, 2015) will be responsible for payment. This rule also applies to audio bridging services. The fee for ITSPs is based on end user telecommunications revenues reported on the 2015 FCC Form 499-A. ITSPs pay $0.00331 per assessable dollar.
- CMRS Providers. CMRS mobile service providers (cellular, public mobile) will be responsible for contributing a total of $60,180,000 in regulatory fees while CMRS messaging service providers will be responsible for contributing $208,000. These fees are based on the number of subscribers or telephone number counts as of December 31, 2014. CMRS Mobile Service providers (cellular/public mobile) pay $0.17 per subscriber or telephone number while CMRS Messaging Service providers pay $0.080 per subscriber or telephone number.
- Cable TV Systems (including IPTV). Cable TV providers will be responsible for contributing a total of $61,920,000 in regulatory fees. Cable television providers must pay regulatory fees for the number of basic cable television subscribers as of December 31, 2014. Cable TV Systems (including IPTV) pay $0.96 per basic cable television subscriber.
Fact sheets detailing the types of fees, fee codes, payment methods and options can be found on the FCC’s website.
Please be advised that attorneys in Kelley Drye & Warren’s Communications 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.
For further information on any of these filings, please contact your usual Kelley Drye attorney.