DirecTV, DISH: FCC Shouldn't Hike Regulatory Fees - Multichannel

DirecTV, DISH: FCC Shouldn't Hike Regulatory Fees

'Should Not Make Cable-Like Per Sub Regulatory Payment'
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Satellite operators have told the FCC that it would be wrong to charge them a per-sub regulatory fee along the lines of that charged for cable operators.

The FCC supports itself entirely through those fees, which it charges based on how much employee time is taken up with filings, applications and other work related to a particular service. DBS operators currently pay per satellite license rather than per sub.

The National Cable & Telecommunications Association has been pushing the FCC to make the change, and the commission proposed doing so in a September Further Notice of Proposed Rulemaking, while asking a lot of questions about how it could justify the change and how it should be made.

Currently DBS providers pay their fee based on full-time employees (FTE's) in the International Bureau rather than the Media Bureau. The FCC proposed continuing to require that calculation, but adding a fee for Media Bureau FTE's given that there are "certain rules that both DBS providers, and cable operators are subject to, and Media Bureau FTEs provide the oversight and regulation of the DBS industry in these areas."  

In a joint filing, DISH and DirecTV outlined the reasons why they should not be charged that additional fee, which included pointing to the growing strength of cable as a broadband provider and continued video dominance.

"DBS generates nowhere near the regulatory costs of cable," the companies told the FCC. "Cable is subject to a variety of regulation that does not apply to DBS. Cable is the dominant (and growing) provider of broadband services and is thus subject to a panoply of regulation that does not apply to DBS. Cable remains the dominant provider of video and is thus subject to competition-based regulation that has never applied to DBS. And there are only two DBS operators nationwide, but thousands of cable operators—each of which is subject to pervasive regulation not applicable to DBS. In such circumstances, the Commission cannot lawfully require DBS operators to pay regulatory fees along the lines of those paid by cable."

They also said that even if the FCC were permitted to make the change under the Communications Act, which they argue it can't, it would have to justify it to make it legal under the Administrative Procedures Act, which prevents arbitrary and capricious changes. They point out that the FCC rejected the proposal in 2006 and would have to provide a "Reasoned explanation" for the change of course now. "It has yet to do so," they argue.

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