ACA to FCC: Regulatory Fees Should Be Based on Ability to Pay

ISPs Also Tell Agency Not to Start Assessing Fees on Broadband

The American Cable Association has asked the FCC to make satellite operators pay what ACA says is its fair share of regulatory fees, and to scale the fees for all regulated entities according to their ability to pay.

The rate would increase with the number of subs, according to ACA's proposal "so that operators with the largest number of subscribers and therefore the greatest ability to pay would pay a higher rate than the operators with fewer subscribers and the least ability to pay."

ACA represents smaller cable operators, for whom such fees -- cable ops pay 95 cents per sub regardless of size, it points out -- represent a larger percentage of their revenues.

ACA's pitch came in comments at the FCC on a notice of proposed rulemaking on those fees. The FCC has said the fees need to be both fair and sustainable. ACA says it agrees, but that foremost should be fairness, which means based on the ability to pay, like the graduated federal income tax, and making the two DBS carriers who are the number two and three MVPDs in the country pay regulatory fees. Satellite operators currently pay on a per-facilities basis rather than per sub.

The FCC's annual budget -- about $350 million -- is funded almost entirely by regulatory fees.

In the notice, issued in July, the FCC asked how it should change its regulatory fee structure to match the "extensive changes" in the communications marketplace. The FCC has not revamped how it collects fees from the entities it regulates since 1998.

The FCC is seeking input on fairness, ability to administrate it, sustainability, how the direct and indirect costs should be allocated, and how to mitigate any substantial fee increases realignment could create.

The commission also asked whether it should start assessing fees on broadband service.

Not surprisingly, ISPs including those represented by the National Cable and Telecommunications Association argue that it should not. Among their reasons are that adding a fee that would be passed on to consumers could be a disincentive to broadband adoption, because there is not Broadband Bureau on which to base the fees, which are based on the number of employees working in four bureaus, International, Wired, Wireless and Media, and because companies are already paying into those four bureaus, they are already covering whatever work those employees are doing on broadband.