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FCC Announces Annual Regulatory Fee Deadline, Gives Break to Small Market Radio Stations and Stations in Hurricane-Affected Areas

[Breaking News: Moments before the release of this post, the FCC issued a Public Notice announcing an extension of time to the end of the government’s fiscal year for regulatory fee payors in areas affected by Hurricanes Harvey and Irma to make their regulatory fee payments.  Regulatees in Florida, Puerto Rico, the US Virgin Islands, and affected portions of Texas, Louisiana, Alabama, and Georgia have until midnight on September 29, 2017 to file and pay their fees.  While that only provides an additional three days to pay, the FCC indicates that anyone needing additional relief can file a request using the Commission’s established deferral/reduction request procedures.]

With the end of the government’s fiscal year comes the obligation to pay the annual regulatory fees that defray the cost of FCC activities for which a separate fee, such as an application processing fee, is not paid.  These activities include, ironically enough, rulemaking and enforcement activities that regulatees might prefer not to fund.

Each year, the FCC is required to conduct a proceeding determining how to allocate the cost of its operations among the various industries and types of entities it regulates.  After soliciting comments on each year’s proposed fees, the FCC releases a final order stating how it will apportion the fees among various regulatee categories for the fiscal year.  Thereafter, it issues a Public Notice announcing the deadline for paying the fees, and releases Fact Sheets for each category of regulatee providing more detailed information about how to pay those particular fees.

Over the course of last week, the FCC released its Report and Order setting this year’s annual regulatory fee amounts and almost immediately thereafter announced that annual regulatory fees are due by September 26, 2017.  It also announced that its Fee Filer system is now open to receive payments.  For Media Bureau regulatees, the FCC released this Fact Sheet setting forth the fees for each class and category of broadcast license.  Licensees subject to the fees must file a report listing the fees they owe through the Fee Filer system and then pay that amount by 11:59 pm (ET) on September 26.

This year’s Regulatory Fee Order contained at least some good news for certain broadcasters in the form of reduced fees.  Specifically, television stations in all market sizes saw modest decreases in their fees over last year, although the FCC continues to question whether there are television stations paying the lower satellite station fee that are not entitled to do so and whether the fee for satellite television stations should be increased substantially next year.

On the radio side, all radio broadcasters with a population served of 75,000 or less also saw a decrease in their fees.  However, that was balanced by an increase in fees for radio stations serving a population of more than 3,000,000, with some of those fees increasing by as much as $5,000.  Radio stations between these two extremes received a mixed bag of increases and decreases, apparently as a result of the FCC’s efforts to make the increments between tiers more proportional.

The Regulatory Fee Order contained particularly good news for some small market “singleton” stations.  The FCC increased the de minimis fee exemption from $500 (it had been $10 before 2014) to $1,000.  When it was $500, the exemption only helped a few licensees of stand-alone translator, booster and low power television stations.  With a $1,000 exemption, many stand-alone AM and some stand-alone FM stations in smaller markets are now also relieved of both the obligation to file the report of fees owed and to pay those fees.  Note that in determining whether the exemption applies, the FCC adds together all of the regulatory fees owed by a regulatee, so a small market licensee will lose the exemption if it has other regulatory fees due that, along with the radio station regulatory fee, add up to more than $1,000.

Regulatees who owe less than $25,000 can pay using a credit card.  Those owing $25,000 or more must use wire transfer, debit card, or bank ACH to pay.  Department of Treasury rules prohibit a single entity from paying more than $24,999.99 to a single government agency in a single day by credit card.  This limit applies whether the payment is made as a single payment or as a series of smaller payments that together add up to $25,000 or more.

Failure to timely pay regulatory fees brings with it a 25% penalty, administrative fees, and should the fees remain unpaid for any length of time, rather merciless fee collection activity from outside collection agencies.  Failure to pay regulatory fees at all (as opposed to paying them late) can bring even greater woes, up to and including loss of license.

So, unless you are in a hurricane-affected area, mark September 26th on your calendar as “Reg Fee Day”.  Like death and taxes, annual regulatory fees have become another certainty of life for those regulated by the FCC.  Unlike death, however, some may qualify for an exemption.