ACA to FCC: Boost DBS Fee ASAP

Group also says FCC should double proposed increase

Cable operators agree with direct broadcast satellite operators that the DBS regulatory fee the FCC plans to assess is the wrong one, but disagree on why.

The FCC has proposed doubling the DBS fee from 12 cents per sub to 24 cents per sub as the agency phases in its decision to start assessing per-sub fees on DBS operators, as it does on other MVPDs.

DBS operators --  which used to pay a much lower per-license fee -- have told the FCC that the agency had not justified the boost and would cause "rate shock" given that the boost would be passed on to customers.

In its reply comments, the American Cable Association doubled down on its initial comments, saying that it agrees the 24 cent fee was not appropriate, but because it was still 75% lower than the fee on cable operators.

"Once again, the proposed rate for DBS is inexplicably and unreasonably low, leaving an unfair share of Media Bureau regulatory fees to be borne by cable operators and IPTV providers," the ACA said.

The organization said the FCC has not justified how disproportionately low the 24 cents per-subscriber fee is compared with the $1 per sub MVPDs are expected to pay per year.

The ACA was not buying the DBS argument of "rate shock." It said DBS operators have been on notice for years that they would eventually have to pay more.

"Moreover, there is no evidence that 'rate shock' occurred when the Commission imposed a 99 cent per-subscriber fee on IPTV providers in 2014, or when a 12 cent per-subscriber fee was assessed on DBS providers last year, or that the concept has much validity in this context at all," the ACA said.

The ACA wants the FCC to level the per-user fee playing field immediately , charging DBS the same as cable, but if not that at least to double the fee to 48 cents per sub per year and bring it up to "full parity" by 2017.

The FCC issued a notice of proposed rulemaking (NPRM) in May proposing to double DBS regulatory fees in 2016 from 12 cents per sub to 24 cents.

DBS was moved into the MVPD category at a 12-cent-per-sub fee in 2015. Satellite providers had been paying on a per-satellite-license basis, while other multichannel video programming distributors have paid on a per-subscriber basis. Not surprisingly, cable operators have long pushed for parity.