Articles Posted in Low Power FM & Translators

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Pillsbury’s communications lawyers have published the FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • National Cable Sports Network Draws Proposed Fine of $146,976 for Transmitting False EAS Tones
  • For-Profit Arrangement Lands Michigan Noncommercial Radio Station in Hot Regulatory Water
  • California LPFM Station Agrees to $9,000 Consent Decree for Numerous Rule Violations

FCC Proposes $146,976 Fine Against National Cable Sports Network for Transmitting False EAS Tones

The Federal Communications Commission issued a Notice of Apparent Liability for Forfeiture (NAL) to a cable sports network for violating the Commission’s Emergency Alert System (EAS) rules.  Specifically, the NAL alleged violations of Section 11.45 of the FCC’s Rules, which prohibits the transmission of false or deceptive EAS tones.

The EAS is a nationwide public warning system designed to alert the public in case of emergencies, such as severe weather warnings or AMBER alerts.  To maintain the effectiveness of such emergency alerts, EAS tones may only be aired for specific uses, such as actual emergencies, authorized tests, and qualified public service announcements (PSAs).  Section 11.45 strictly prohibits airing an EAS tone, or simulations of it, except in connection with these permitted uses.  The FCC takes false EAS tone violations particularly seriously, asserting that violations desensitize the public to legitimate EAS alerts.

In October 2023, the FCC received complaints alleging a cable network had transmitted EAS tones during a sports promotional video.  In January 2024, the Commission’s Enforcement Bureau sent a Letter of Inquiry requesting information about the incident.  The network responded, providing video recordings of the sports-related promo video that had aired for three days and admitting that it contained an EAS tone.  While the network argued the promo video contained fewer than two seconds of EAS tone, it did acknowledge that the tone was not aired in connection with an actual emergency, authorized test, qualified PSA, or other permitted use.  The network also acknowledged that the promo video aired six times over three days on two different networks.

Based on the network’s admissions and the FCC’s review of the video, the FCC found six apparent violations of Section 11.45 of the Commission’s Rules.  The FCC noted that while the two-second duration was shorter than a full EAS tone, it was long enough for viewers to recognize the sound as an EAS tone. Continue reading →

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The FCC’s rules require that all Emergency Alert System (EAS) Participants update their identifying information in the EAS Test Reporting System (ETRS) annually.  Accordingly, all EAS Participants must update and submit their ETRS Form One for 2024 by Friday, October 4, 2024.

For broadcasters, EAS Participants include full power radio and TV broadcast stations, low power FM stations, and Class D noncommercial educational FM stations.  Low power TV stations, unless they are operating as a TV translator station, must also submit a Form One.  Stations must file a Form One even if they are silent pursuant to a grant of Special Temporary Authority.

The following types of stations are exempt from this filing requirement:

  • TV translator stations
  • FM translator or booster stations that entirely rebroadcast the programming of a local broadcast radio station
  • Stations that operate as satellites or repeaters of a hub station (or common studio or control point if there is no hub station) and rebroadcast 100 percent of the programming of the hub station (or common studio or control point). Note that the hub station (or common studio or control point) must file a Form One.

While the FCC often ties the deadline for filing the annual Form One to the occurrence of a nationwide EAS test, the Federal Emergency Management Agency and FCC have not announced a national test this year.  As a result, the Form One must be filed independently to satisfy the annual filing obligation.  The most recent nationwide test was held October 4, 2023.  That test was largely successful, with nearly 97 percent of EAS Participants receiving the test message and about 94 percent of Participants successfully relaying the message.  These numbers represent a seven percent increase over the receipt and relay success rates reported for the 2021 test (the last nationwide test conducted prior to 2023).

Form One filers should review the FCC’s Public Notice concerning this filing requirement, as well as the FCC’s ETRS Form One Filing Guide and Frequently Asked Questions for information about using the ETRS, and consult their state’s EAS Plan before responding to the EAS operational area and monitoring assignments prompts.

Filers should be sure to have on hand the FCC username and password associated with the FCC Registration Number(s) (FRN) of the entity(ies) for which they are filing.  Users who have not previously created a username may do so by visiting the User Registration System.  Filers should visit the main ETRS page to file their Form One in advance of the October 4 deadline in case they encounter any filing portal errors and need time to resolve them before the deadline.

 

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Earlier this week, the FCC opened CORES to accept FY 2024 regulatory fee payments and announced a payment deadline of September 26, 2024.  Since that time, however, broadcasters have encountered a number of issues when trying to pay their fees.  The most common issues include:

  • Difficulty accessing the system
  • Assessment of inaccurate fees
  • Failure to assess fees for all stations associated with a licensee’s FRN
  • Stations being listed in incorrect service categories (e.g., a TV translator being listed as a full-power TV station, and vice versa)
  • Fee-exempt stations being listed as feeable

The FCC today acknowledged that incorrect population count information in particular is resulting in incorrect fee assessments for a significant number of AM and FM stations.  In response, the FCC has temporarily deactivated the fccfees.com lookup site and has also added the following notice on the CORES log-in page:

NOTICE: The FCC is continuing to do its due diligence to reevaluate the population count information for AM and FM broadcasters for FY 2024 regulatory fees. We expect to have this situation resolved early next week. In the meantime, we request that AM and FM broadcasters do not make any payments in CORES. Thank you for your patience.

Accordingly, AM and FM broadcasters should hold off on generating their fee reports or submitting regulatory fee payments to the FCC until this issue is resolved.  Other broadcasters would also be wise to pay close attention to the fees that CORES assesses for their stations to ensure that they do not under- or over-pay and that all stations are properly accounted for.  We recommend that you seek assistance from experienced FCC counsel if you encounter any of the issues listed above (or other system issues). As noted in our previous post, failure to pay in full can lead to significant interest and penalties (and efforts to recoup overpayments may be time consuming).

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Following last week’s adoption of the 2024 Regulatory Fee Report and Order, which we discussed here, the Federal Communications Commission today released its annual Public Notice setting 11:59 p.m. Eastern Time on September 26, 2024 as the payment deadline for fiscal year 2024 regulatory fees.  The FCC also opened  the online system for submitting those payments.

Note that the FCC’s old “Fee Filer” system has been retired and regulatory fees must now be paid via the FCC’s Commission Registration System (CORES).  Logging into CORES requires users to set up a personal account using an email and password of their choosing.  We have previously provided step-by-step instructions for how to do so here.  Additionally, in March 2024, CORES moved to a two-step login authentication process, whereby each time a user logs into CORES, the user will be prompted to request a six-digit verification code that will be emailed to the email address(es) associated with the username.  The user must then enter the code into CORES to finish the log-in process.

As this is still a fairly new process, we suggest logging in well before the payment deadline to ensure you are able to access the system and successfully pay your regulatory fees, as late or unpaid fees incur interest and are assessed a 25% penalty, and can put a licensee in “red light” status.  Stations that are unable to make their regulatory fee payment by the deadline or that need additional relief such as a payment plan or reduction/deferral of their fees should make those requests to the FCC as soon as possible.  The Commission released a separate Public Notice detailing the procedures to apply for such relief.

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Today, the Federal Communications Commission released its Report and Order setting this year’s annual regulatory fee amounts.  Payments will be made electronically via the FCC’s Commission Registration System (CORES), but the FCC has yet to announce the date the system will open or the date the fees are due.  Given that the fees must be collected before the end of this month, that announcement is expected very soon.

For fiscal year (FY) 2024, the FCC will be collecting a total of $390,192,000 to fund the FCC’s operations, the same amount as last year.  For the second year in a row, however, broadcasters will see a decrease in their regulatory fees.  As we noted in 2023, this decrease can be credited at least in part to the years-long effort by state broadcasters associations and the NAB to persuade the FCC to reevaluate its methodology for allocating regulatory fees and to expand the pool of entities that are charged regulatory fees.  These past few years have seen significant progress on the first initiative, resulting in this year’s reduced fees, but the battle to convince the FCC to expand its payor base (as dictated by the governing statute) continues.

For television stations, the FCC will use the same population-based methodology for FY 2024 as it used in FY 2023.  However, the FCC has adopted a fee of $.006598 per-person-served for FY 2024, which is a decrease from the $.007799 per-person-served used for FY 2023 TV regulatory fees.  Some additional shifts will be caused by FY 2024 fees being the first to incorporate 2020 U.S. Census data into these calculations.

Radio broadcasters will also see a decrease in their regulatory fees this year, with a reduction of approximately 5% across the board.  To determine the precise regulatory fees owed, broadcasters should consult Appendices C (Radio) and G (Television) at the end of the Report and Order.

Another change for FY 2024 is the elimination of the temporary relief measures that were adopted during the COVID-19 pandemic.  The FCC had provided relief to payors facing financial hardship as a result of the pandemic, including allowing regulatees in “red light” status (those already behind on regulatory fee or other payments to the FCC) to “request waiver, reduction, deferral, and/or installment payment of their FY 2023 regulatory fees, provided that those regulatees resolve all of the delinquent debt they owe to the Commission in advance of the Commission’s decision on their requests for relief.” Continue reading →

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Pillsbury’s communications lawyers have published the FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • Florida Radio Station Faces $14,000 Proposed Fine for Contest Rule Violations
  • $6,500 Fines Targeted at Mississippi and Tennessee FM Translators for Late-Filed License Renewal Applications and Unauthorized Operation
  • FCC Continues Focus on Collecting Unpaid Regulatory Fees from Broadcasters

FCC Fines Florida Radio Station for Contest Rule Violations

The FCC proposed to fine a radio broadcaster $14,000 for violating the Commission’s Contest Rule while conducting a multi-station contest.  Specifically, the FCC issued a Notice of Apparent Liability for Forfeiture (NAL) asserting that the broadcaster failed to select and/or notify contest winners in a timely fashion, as required by the licensee’s announced contest terms.

Section 73.1216 of the FCC’s Rules requires a licensee to “fully and accurately disclose the material terms” of a contest it broadcasts or promotes and to conduct the contest “substantially as announced and advertised.”  Material terms include, among other things, eligibility restrictions, the time and means of selecting winners, and the extent, nature, and value of prizes.  Prizes must be awarded promptly, and the FCC has consistently found violations where stations failed to award prizes in accordance with the announced contest terms.

In April 2021, the FCC received a complaint alleging that one of the licensee’s radio stations had not conducted a contest in a manner “substantially as announced and advertised.”  The Enforcement Bureau issued a Letter of Inquiry (LOI) to the licensee in August 2021.  In its November 2021 response, the licensee explained that during the first half of 2021, it had conducted a nationwide contest on 194 of its stations.  During the contest, each participating station announced a contest “keyword” once an hour, for eleven hours each day, for 27 days.  Listeners could qualify to win by submitting this keyword via text message or the internet before the end of the hour in which the word was announced.  One national winner would then be picked each hour from across all stations, creating 297 winners (11 per day x 27 days).  The prize was a $1,000 check and winners were to be notified within 72 hours, according to contest terms.

Upon review, the licensee discovered that as a result of human error, the contest had not been conducted according to the announced contest terms.  In its LOI response, the licensee disclosed that (1) the part-time employee tasked with randomly selecting a national winner from among those qualified sometimes failed to do so; (2) the part-time employee’s manager did not provide supervision to confirm winners were selected; and (3) some winners were never notified they had been selected.  Ultimately, 50 winners out of 297 were not timely selected and/or notified.  After receiving the LOI but before submitting its response to the FCC, the licensee selected and notified 50 “replacement” winners.

The licensee argued that its actions did not amount to a violation of the rules because (1) an insubstantial number of winners that were not timely selected/notified compared to the total number of winners; (2) the contest terms only required the licensee to select “a total of up to, but not more than,” 297 verified winners; (3) it was not done intentionally, but was merely the “poor performance of two employees” that caused the selection/notification failures; and (4) the licensee went to “great lengths” to mitigate the selection/notification failures, eventually awarding prizes to all “winners” who completed the required paperwork. Continue reading →

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Pillsbury’s communications lawyers have published the FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • Louisiana TV Station Admonished for Lack of Non-Discrimination Clause in Advertising Contracts
  • $25,000 Fine for a Variety of Rule Violations by Florida Low Power FM Station Affirmed
  • FCC Proposes $367,436 Fine for Marketing Violations Involving WiFi Devices

FCC Media Bureau Admonishes TV Station for Lack of Non-Discrimination Clause in Advertising Contracts

The FCC’s Media Bureau admonished a Louisiana TV station for failing to include a non-discrimination clause in its advertising sales contracts.  While it stopped short of issuing a fine, the Bureau warned that future violations could result in harsher sanctions.

Since 2008, the FCC has required commercial radio and television stations to include explicit non-discrimination clauses in their ad sales contracts.  To ensure compliance, the FCC revised its broadcast license renewal application form in 2011 to require commercial broadcasters to certify that their ad sales contracts contain a non-discrimination clause making clear to advertisers that the station will not accept advertising placed with an intent to discriminate on the basis of race or ethnicity.  If a licensee is unable to certify compliance, the FCC requires an attachment to the license renewal application explaining the circumstances and why such non-compliance should not be considered an obstacle to the station’s license renewal.

The TV station responded “No” to the non-discrimination certification in its license renewal application, noting that its advertising agreements did not contain a non-discrimination clause.  The station indicated, however, that it does not permit discrimination in its ad sales and that it would add a non-discrimination clause to its ad sales contracts going forward.

In light of the absence of any evidence that the station had actually engaged in discriminatory ad sales, the Media Bureau admonished the station, granted its license renewal application, and warned that any future violations could trigger fines or more severe sanctions.

While enforcement actions involving the FCC’s advertising non-discrimination requirements are uncommon, that is because most stations are able to make the necessary certification in their license renewal application.  Radio and television broadcasters should examine their advertising contracts to ensure they contain the necessary language and that their stations have in fact been meeting their obligation to prevent discrimination by race or ethnicity in advertising sales.

FCC Enforcement Bureau Denies Petition to Reconsider $25,000 LPFM Fine

The FCC Enforcement Bureau denied a Petition for Reconsideration filed by the licensee of a Florida low power FM radio station, finding unpersuasive the licensee’s argument that a $25,000 fine should be cancelled due to the licensee’s inability to pay.

A 2022 Forfeiture Order concluded that the licensee failed to: (1) operate the station according to the parameters of its license and the FCC’s rules; (2) make the station available for inspection by FCC field agents; and (3) properly maintain Emergency Alert System (EAS) equipment. Continue reading →

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Pillsbury’s communications lawyers have published the FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • Maine LPTV Licensee Agrees to Pay $2,500 for Closed-Captioning Violation
  • Georgia Broadcaster Loses FM Translator License, Faces Five-Figure Fine for Various Alleged Rule Violations
  • FCC Proposes $9,500 Fine for Missouri LPTV Licensee for Failing to File License Application and Renew Special Temporary Authority

Low Power Television Licensee Enters Into Consent Decree for Closed Captioning Violation

The Federal Communications Commission’s Enforcement Bureau and the licensee of a low power television station entered into a Consent Decree to resolve an investigation into whether the licensee violated the FCC’s Rules pertaining to closed captioning of video programming.  Under the Consent Decree, the licensee admitted to violating the FCC’s closed captioning rules, agreed to implement a compliance plan, and pay a $2,500 penalty.

The FCC’s closed captioning rules are designed to ensure that individuals with hearing disabilities have full access to video programming content.  The FCC’s Rules, among other things, require Video Programming Distributors to: (1) pass video programming with closed captioning to viewers with the original closed captioning data intact; (2) maintain their equipment and monitor their signal transmissions to ensure the closed captioning is reaching viewers; and (3) maintain records of their maintenance and monitoring activities.

In June 2021, a cable subscriber noticed that the station’s programming did not contain closed captioning and contacted their cable provider.  The cable provider told the viewer that the signal from the station did not contain closed captioning, so the viewer contacted the station directly in July 2021.  The station explained that it was getting new equipment which would fix the closed captioning problem, but after three months, the closed captioning was still missing from the programming.  After no further response from the station, the viewer filed a complaint with the FCC in October 2021.  Despite telling the FCC in November 2021 that it had identified the problem and was working to replace the deficient equipment, the licensee failed to timely respond to a December 2021 Letter of Inquiry (LOI) from the FCC.  A second LOI was issued in April 2022, prompting the licensee to respond in part to both LOIs.

After an investigation, the FCC determined that the licensee had failed to pass through closed captioning on its programming for a total of eight months.  Additionally, the FCC found that the licensee was not fully responsive to the viewer’s complaint or the FCC’s LOIs during the investigation, in violation of Section 1.17 of the Commission’s Rules.

To resolve the investigation, the licensee agreed to enter into a Consent Decree under which it will designate a compliance officer, implement a multi-part compliance plan, including implementing procedures to monitor its transmissions, routinely conduct equipment checks, and pay a $2,500 civil penalty.  The Consent Decree also indicates that in the event the licensee fails to comply with the requirements to monitor its transmissions and conduct equipment checks, it will pay an additional $12,500 civil penalty.

 Variety of Alleged Rule Violations by Georgia AM Station Generate Proposed $16,200 Fine and License Cancellation for Its FM Translator

A Georgia broadcaster faces a Notice of Apparent Liability for Forfeiture (NAL) and a $16,200 fine for several alleged FCC rule violations, including operating a full-power AM radio station at variance from its license, discontinuing operation of the station without notifying the FCC or obtaining FCC authorization to do so, transferring control of the station and its FM translator to another party without FCC authorization, and failing to completely and fully respond to FCC inquiries.  The FCC also found that the translator’s license had automatically terminated after the translator failed to operate from its authorized location for more than a year. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • FCC Proposes $116,156,250 Robocalling Fine for Over 20,000 Calls to Toll Free Numbers
  • Illinois Class A TV Station Pays Nearly Six-Figure Penalty for FCC Violations
  • FCC Proceeds with $4,000 Civil Penalty Against Alaska Broadcaster Following Investigation

Robocaller Fined Over $116 Million for TCPA Violations

The FCC issued a Forfeiture Order imposing a $116,156,250 penalty against one individual and three related companies (the Companies) for making 9,763,599 illegal robocalls to toll free numbers without the called party’s prior express consent.  The robocalls claimed to be a “Public Service Announcement” warning toll free customers about the dangers of illegal robocalls, and would repeat for up to ten hours unless the receiving party terminated the call.  This is one of the largest Telephone Consumer Protection Act (TCPA) robocall fines ever issued by the FCC.

As we discussed here, in July 2022 the FCC adopted a Notice of Apparent Liability for Forfeiture (NALF) in which it proposed a $116 million penalty.  The individual contested it, stating that he struggled to find anything in the NALF that is accurate, but offering no counterarguments to the FCC’s findings.  The individual asserted that he was not the party the FCC was after, that the calls were permissible because they were made in good faith, that he did not violate the TCPA “with intent” because he was purportedly advised by a lawyer that the robocalling operation did not violate the TCPA, and that the FCC should have issued a warning prior to releasing the NALF.

When the FCC assesses fines, it considers the “nature, circumstances, extent, and gravity of the violation and, with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and such other matters as justice may require.”  After fully considering the individual’s responses to the NALF, the FCC affirmed the fine, stating that it was in accordance with Section 503(b) of the Communications Act of 1934 (the Act), Section 1.80 of the Commission’s Rules, and the FCC’s Forfeiture Policy Statement (Forfeiture Policy).

The TCPA, Section 227(b)(1)(A)(iii) of the Act, and Section 64.1200(a)(1)(iii) of the FCC’s Rules prohibit making prerecorded voice calls to numbers for which the called party is charged for the call (including toll free numbers) unless there is an emergency, or the recipient has given prior express consent to receive the call.  The FCC found that the Companies made 9,763,599 illegal robocalls to toll free numbers, and the FCC’s Enforcement Bureau (the Bureau) staff verified at least 20,650 of those calls were violations of the TCPA.

The FCC dismissed the individual’s ‘mistaken identity’ argument as meritless, explaining that its investigation identified the Companies as the source of the 20,650 verified robocalls.  In October 2020, an industry group tasked by the Bureau with tracing illegal robocalls alerted the Bureau that a caller was apparently targeting toll free services with robocalls.  The calls were traced to a competitive local exchange carrier (CLEC) which identified the sources of the calls as two of the Companies.  The CLEC supplied records showing that the individual signed a service agreement with the CLEC in July 2020 for several thousand direct inward dial telephone numbers and VoIP service.  Additionally, call records produced by the CLEC showed millions of calls to toll free numbers originating from the Companies’ account between January and March 2021.  The CLEC paid one of the Companies $0.0001 (one ten thousandth of a cent) for each minute of outbound calls that it made to toll free numbers.  The individual then used the revenue from the robocalls to fund telephone denial of service (TDoS) attacks against other companies. The individual offered no evidence to refute these findings, and the FCC concluded that the Companies made the calls identified in the NALF.

The FCC also dismissed the argument that the calls were permissible because the toll free customers receiving them were not charged for calls.  The FCC reviewed a number of the toll free service providers’ publicly available billing practices, and found that the providers do indeed charge their toll free customers on a per call basis or in bundles of minutes.  Thus, the robocalling scheme resulted in actual financial losses to the toll free customers receiving the calls.  Finally, the FCC explained that there is no “good faith” or “public safety doctrine” exception in the TCPA that would permit the calls, rejecting the individual’s claim that he “acted in good faith.”

Section 227(b)(4)(E) of the Act provides that the statute of limitations is four years (rather than one year) if the violation was committed “with the intent to cause such violation.”  In the NALF, the FCC stated that the Companies made prerecorded calls with the intent to violate the TCPA because the Companies (1) targeted protected toll free numbers; and (2) had no reasonable basis to believe they had consent for the calls.  The FCC noted that the individual’s response refuted neither of those findings, as he did not contest that he targeted toll free numbers, and merely argued that reliance on legal advice constituted a defense against liability.  The FCC disagreed, and cited the Companies’ complex calling scheme as further evidence of intentionality.

Despite the individual’s claim that he was entitled to a warning, the Commission noted that the TRACED Act allows the FCC to issue a Notice of Apparent Liability for violations of Section 227(b) of the Act without first issuing a warning citation.  The FCC affirmed its decision in the NALF, concluding that the $116,156,250 fine was warranted due to the Companies’ egregious conduct.  After considering the relevant factors and its Forfeiture Policy, the FCC found that the proposed base fine and upward adjustments applied in the NALF were consistent with the FCC’s rules.  The Commission therefore found the individual and Companies jointly and severally liable, and the $116,156,250 fine must be paid within 30 calendar days after the release of the Forfeiture Order.

Rule Violations by Illinois Class A TV Station Result in Consent Decree and $97,000 Penalty

In the course of processing the license renewal application of an Illinois Class A TV station, the FCC’s Media Bureau determined that (1) the license renewal application was filed nearly a month after the filing deadline; (2) the applicant certified that there had been no violations by the licensee of the Act or the rules or regulations of the FCC during the preceding license term; and (3) the applicant certified that all required documentation had been uploaded to the station’s Public Inspection File when required.  According to the Media Bureau, however, the licensee failed to timely upload 28 issues and programs lists, all of its records concerning commercial limits compliance in children’s programming, 23 children’s television programming reports, and copies of documents related to a 2014 forfeiture order issued to the licensee.

Section 73.3526 of the FCC’s Rules lists the materials a Class A TV station must upload to its Public Inspection File and the deadlines for making those submissions.  Under Sections 73.3514(a) and 1.65(a) of the FCC’s Rules, applications filed with the FCC must include all information called for by the application form, and the applicant must ensure the continuing accuracy and completeness of its application by making any necessary amendments within 30 days of a response becoming inaccurate.

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Today the Federal Communications Commission released its annual Public Notice setting the deadline for paying annual regulatory fees.  Payments can be made via the FCC’s Commission Registration System (CORES) beginning today through 11:59 p.m. Eastern Time on September 20, 2023.

In addition to marking this deadline on their calendars, broadcasters should note with some satisfaction that despite the FCC’s overall budget increasing by more than $8,000,000, regulatory fees for broadcasters decreased by between 5 and 8%.  That decrease results from years of effort by broadcasters’ state and national trade associations, who have repeatedly argued that the FCC’s methodology for allocating regulatory fees does not accurately reflect how the work of the FCC has changed since the regulatory fee regime was instituted more than 30 years ago.

The FCC’s fee-setting methodology divides its workforce into what it calls direct and indirect FTEs (“Full Time Employees” or “Full Time Equivalents”).  Direct FTEs are those who work directly for one of the four “core” licensing bureaus: the International Bureau, the Wireless Telecommunications Bureau, the Wireline Competition Bureau, and the Media Bureau.  (The core bureaus will be updated next year to reflect the creation of the new Space Bureau.)  Indirect FTEs are all other FTEs of the FCC, which are treated the same as FCC “overhead” (e.g., rent) in setting fees.

The FCC allocates its budget among the regulatees of each of the four core licensing bureaus in proportion to the number of direct FTEs working in that particular bureau.  Since the Media Bureau houses approximately 32% of all the direct FTEs, its regulatees, including broadcasters, have to pay 32% of all agency overhead (which includes indirect FTEs) as well.

In recent years, only about one-quarter of the agency’s total FTEs have been considered direct, while the remaining three-quarters are considered indirect.  As a result, the determination as to which regulatees must pay the lion’s share of the FCC’s total budget is based on the categorization of those relatively few direct FTEs.  This impact is further exacerbated by the existence of indirect FTEs that are housed outside of the four core licensing bureaus, but whose work benefits specific industries.  Since they do not work in one of the core bureaus, they are not treated as a direct cost of the industries their work actually benefits, but as just more FCC overhead to be paid for by broadcasters and other industries that do not benefit from their work.

So, what changed this year?  In response to an influx of comments the FCC received in response to a Notice of Inquiry and a Notice of Proposed Rulemaking, the FCC reexamined the work performed by FTEs in certain of its indirect bureaus and offices, including the Office of Economics and Analytics, the Office of General Counsel, and the Public Safety and Homeland Security Bureau.  Based on this review, the FCC reallocated a large number of these previously indirect FTEs to direct FTE status. Continue reading →