Annual FCC Regulatory Fees Due September 24, 2021; FCC Streamlines Financial Hardship Payment Request Procedures
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 (collectively, “regulatees”) must pay regulatory fees annually to offset costs associated with the FCC’s enforcement, public service, international, policy, and rulemaking activities.
On September 7, 2021, the FCC released a Public Notice announcing that payment for FY 2021 annual regulatory fees must be received no later than 11:59 PM Eastern Daylight Time on September 24, 2021. Regulatory fees not paid by the due date are subject to a mandatory 25% late payment penalty and may accrue interest. Although the regulatory fees will not officially become effective until published in the Federal Register, regulatees that are required to pay fees have discretion to submit payments at any time before the deadline. Note: the Commission will not issue bills for the regulatory fees and it is the regulatee’s responsibility to determine the fees owed (regardless of the amount posted on the Fee Filer system).
In the FY 2021 Regulatory Fees Report and Order, the Commission extended the streamlined filing procedures for fee waiver, deferral, and installment payment requests implemented in FY 2020 to FY 2021 for financial hardship reasons related to the coronavirus (COVID-19) pandemic. The streamlined procedures include:
(1) directing regulatees seeking relief to file their requests by email to a dedicated email address, and
(2) permitting regulatees to file a single consolidated request for waiver, deferral and/or installment payment
Select Regulatory Fee Categories
The FCC has assessed and plans to collect a total of $374,000,000 in regulatory fees for fiscal year (FY) 2021. Fee amounts change each year and vary by type of activity. Fact sheets detailing the types of fees, fee codes, payment methods and options for all regulatory fees typically are provided on the FCC’s website. Information about the fee categories most relevant to Kelley Drye’s client base is included below.
Telecommunications Service Providers (including Toll Free Numbers). The Interstate Telecommunications Service Provider (ITSP) fee must be paid by most service providers, including VoIP providers and audio bridging providers. The ITSP regulatory fee is based on end user telecommunications revenues reported on the 2021 FCC Form 499-A and this fee has increased to $.00400 per dollar of subject revenue for FY 2021 (compared to $.00321 for FY 2020). Responsible organizations (“RespOrgs”) with toll free numbers must pay regulatory fees based on their toll free number count as of December 31, 2020. For FY 2021, the toll free number fee remains the same as last year at $0.12.
Licensed CMRS Providers. Licensed commercial mobile radio service (CMRS) providers must pay annual regulatory fees for each license held as of October 1, 2020, even if the license expired after that date. If the license was transferred or assigned after October 1, 2020, the fee is owed by the party holding the license as of the regulatory fee due date. CMRS fees are based on the regulatee’s number of subscribers or telephone number counts as of December 31, 2020. For FY 2021, CMRS cellular radio and mobile service providers will pay $0.15 per subscriber or telephone number, down from $0.17 for FY 2020, while CMRS messaging service providers experienced no rate change from FY 2020 and will pay $0.08 per subscriber.
Submarine Cable Systems and International Bearer Circuits. Submarine cable systems are subject to a six-tier regulatory fee structure based on the cable system’s lit capacity as of December 31, 2020. Terrestrial and Satellite International Bearer Circuits are subject to a fee of $43 per active Gbps circuit for FY 2021, up from $41 per Gbps circuit for FY 2020.
Waiver and Installment Plan Requests
Recognizing that regulatees subject to FY 2021 annual regulatory fees may have suffered financial hardship during the current COVID-19 pandemic, the FCC has extended to FY 2021 the temporary COVID-19 relief measures it adopted for FY 2020 regulatory fees. The FCC streamlined the procedures for regulatees to seek waiver, reduction, deferral, and installment payments plans for FY 2021 regulatory fees. Waiver and installment plan requests must be filed on or before September 24, 2021. Parties are directed to file their requests electronically by emailing their requests, together with all supporting financial documents, to the following email address: firstname.lastname@example.org. Waiver requests filed after that date will not be dismissed but any unpaid regulatory fees will be assessed the FCC’s 25% late payment penalty and may accrue interest.
Requests for waiver, reduction, or deferral of FY 2021 regulatory fees, based on financial hardship grounds (“financial hardship waiver”) must include financial documentation showing that the regulatee “lacks sufficient funds to pay its FY 2021 regulatory fee in full while maintaining service to the public.” These requests may also include a request for waiver, reduction, or deferral of the mandatory 25% late payment penalty and interest that the FCC applies when regulatory fees are not paid by the payment due date.
Regulatees that cannot pay their FY 2021 regulatory fees in full by the fee payment deadline also can request a payment installment plan and must provide financial documentation showing that the regulatee cannot pay its FY 2021 regulatory fees in full by the September 24 payment deadline. The Commission is easing its typical payment plan terms including waiving the ten percent (10%) down payment and reducing the usual interest rate.
To streamline the waiver process, the Commission is permitting requests for deferral and waiver of FY 2021 regulatory fees to be combined into a single document, rather than being filed as separate requests, and financial hardship waivers and installation plan requests can be submitted via e-mail. The FCC also is waiving its “red light” rule, that ordinarily prevents FCC processing of an entity’s application or other request when the entity owes a debt to the Commission, for regulates filing financial hardship waiver requests. However, the Commission will not grant a financial hardship waiver or payment plan request without “satisfactory resolution” of all outstanding debt owed by the regulatee to the Commission. Note that the “red light” rule remains in effect for regulatees seeking a waiver or reduction of FY 2021 regulatory fees on grounds other than financial hardship.
De Minimis Exemption
Under the Commission’s de minimis exemption, those regulatees whose annual regulatory fees, across all fee categories, total $1,000 or less, are exempt from paying FY 2021 fees. The de minimis threshold applies only to filers of annual regulatory fees (not regulatory fees paid through multi-year filings), and it is not a permanent exemption. Regulatees 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.
All regulatees must utilize the FCC’s Fee Filer system to coordinate paying any fees. The Commission has released a Public Notice providing detailed information regarding payment procedures and methods. Note that regulatory fee payments must be received by the Commission by the 11:59 PM EDT September 24, 2021 deadline.
It is also important to note that licensees and regulatees must have a current and valid FRN address on file in the Commission’s Registration System (CORES) in order to file and pay regulatory fees.
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 further information on any of these filings, please contact your usual Kelley Drye attorney.