It's official -- FCC regulatory fees are due on August 31. Here are the links you will need to make payment by the deadline:
FCC announcement of the August 31 deadline
FCC public notice -- Payment methods and procedures
FCC public notice - Fee filer system
FCC public notice -- ITSP fees (with payment code)
FCC public notice -- Commercial wireless fees (with payment code)
In July, we reported that the FCC had adopted its FY 2010 regulatory fee schedule. In past years, regulatory fees were due in September, usually in the third week of the month. However, it looks like this year's fee will be due significantly earlier -- by August 31, 2010.
The first hint of an earlier due date appears in the FCC Regulatory Fee Order released on July 9. The order did not establish a due date for regulatory fees, but the Commission stated that it intended to collect fees "during an August 2010 filing window." (see paragraph 1). That made us curious, but not convinced. Last week, however, the FCC released a public notice concerning fees for its radio and TV licensees. That public notice states that the media services fee is "due no later than 11:59 PM, ET, on August 31, 2010." This seems a pretty good indication that fees for all filers will be due earlier than in years past.
Given that late-paid regulatory fees are subject to a mandatory, non-waivable 25% late payment penalty, carriers should plan accordingly.
Following on the release of the 2010-11 TRS Fund contribution factor, the Commission today released its final regulatory fee schedule for FY 2010. The Commission adopted a telecommunications provider fee that is slightly lower than it proposed in April. The regulatory fee for telecommunications providers (including audio bridging providers) is $0.00349 per revenue dollar reported on the April 1, 2010 Form 499-A.
The Commission acknowledged that telecommunications providers pay 46% of all regulatory fees, which several carriers had argued is a disproportionately large percentage of the total amount collected by the FCC. (And I agree.) Recognizing these concerns, the Commission announced that it would be releasing a Further Notice of Proposed Rulemaking to "rebalance" its regulatory fees in the future.
Regulatory fee payments will be due by the end of September and are subject to a 25% late payment penalty if not paid on time. As with last year, the FCC will not mail bills to telecommunications carriers. Carriers are required to check the FCC regulatory fee web page for payment information before the September due date.
We have a classic "man bites dog" story for you today: The FCC announced that its contribution factor for the fund that supports the Telecommunications Relay Service -- a telecom assistance service for persons with hearing or speech disabilities -- is decreasing by nearly 50%. Whereas last year's TRS contribution factor was 1.1% of telecom revenues, the 2010-11 factor is only 0.585% of telecom revenues.
However, this rate was lowered in part by a one-time application of a refund from the 2009-10 fund. Carriers can expect a slight increase in July 2011, after the one-time refund is exhausted.
The new rate is effective as of July 1. Carriers subject to the TRS fund (basically, any entity that files a FCC Form 499) should see the lower rate on their next invoice from the TRS administrator.
Kelley Drye's client advisory on the TRS reduction is available here.
The FCC order setting the TRS contribution factor is available here.
On April 13, the FCC released its proposed schedule of FY 2010 FCC Regulatory Fees. By law, the FCC is obligated to collect $335 million in fees in FY 2010 from the entities that it regulates. This order identifies how the FCC proposes to allocate the fees. Among the highlights:
The Commission has requested comment on these proposals. It will adopt a final regulatory fee schedule in July. Regulatory fee payments will be due by the end of September and are subject to a 25% late payment penalty if not paid on time.
As it does annually at this time, the FCC established its regulatory fee assessment methodology for 2009. For the past few years, Congress has mandated that the FCC recover the majority of its $350 million plus budget from companies within the FCC's jurisdiction via the regulatory fee.
In the Order, the FCC established a regulatory fee for telecommunications carriers of $0.00342 per dollar of interstate and international end user revenues. This is a slight increase over the factor from a year ago. Assessable revenues are determined by a carrier's 2009 Form 499-A, which was filed in April. Regulatory fee payments are due by the end of September and are subject to a 25% late payment penalty if not paid on time. Carriers can find payment information here.
One aspect of the Regulatory Fee Order bears emphasis. The FCC estimates that it will collect $160 million from telecommunications carriers via this fee. That is 47% of the $342 million the FCC expects to collect in regulatory fees, and is, by far, the single largest category of contributions via the fee. This seems disproportionate in view of the many other activities of the Commission. In future years, telecom carriers should study the FCC's calculations more closely and perhaps seek modifications that more fairly reflect the level of regulatory activity associated with telecom services.
Finally, the FCC has a de minimis threshold for collection of the regulatory fee, but the $10 threshold is far too low. By contrast, the de minimis threshold for federal universal service fund contributions is $10,000. Small carriers, especially those that are de minimis for USF purposes, should consider arguing for a higher threshold in future years.
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