A decision on whether to approve a proposed annual regulatory fee hike for radio stations could come any day at the Federal Communications Commission. That’s because the annual fee is due by the end of September each year. But several state broadcast associations are not yet ready to wave the white flag, and last week they met with FCC representatives urging them to reject the proposal, arguing it would be especially hard on small market stations.
Disclosure filing about the meetings show the heads of the Indiana Broadcasters Association, the Minnesota Broadcasters Association, the Georgia Association of Broadcasters and the Montana Broadcasters Association met by phone with representatives of Commissioners Geoffrey Starks and Brendan Carr. In each case the message was the same – the regulatory fee proposal may cause broadcasters to cut back on local news and other local programming to help offset the costs associated with the higher annual fee.
The FCC has proposed (MD Docket No. 21-190) to hike radio’s annual fees as it aims to collect $374 million from all the industries it regulates. The average increase for radio stations in 2021 would be eight percent, but some fees would climb by as much as 15%.
“These stations, like all broadcasters, see operational costs creep up over time, making survival more difficult as local ‘Main Street’ advertisers disappear and are replaced by national or international Internet sellers that don’t advertise on local media. However, they rarely see costs increase by double digit percentages year over year except with regard to annual regulatory fees. Such increases are especially challenging after the huge revenue downturns of the past two years,” said a synopsis of the meetings.
The four association heads also pointed out that the FCC’s own quarterly count of radio stations has shown at least 122 fewer commercial AM and FM stations are on the air since 2019, showing the “increasingly precarious situation [for] many stations. They also noted that point was reinforced earlier this month when Auction 109 ended and roughly a third of the radio licenses up for grabs attracted no bidders.
“The state broadcasters associations therefore urged the Commission to hold the line on any increases in annual regulatory fees for broadcasters,” the disclosure says.
In an earlier joint filing, all 50 state broadcast associations were critical of the FCC proposal. They said the agency continues to “robotically apply its outdated methodology” with such a “lack of transparency and what appear to be inaccuracies” in its data and that it is “nearly impossible” for broadcasters to offer a critique. But one thing is clear, their joint filing said. The broadcast industry “has been unfairly subsidizing its competitors through regulatory fees for almost 30 years.”
The National Association of Broadcasters has also been pressing the FCC to rethink its plan. The latest addition to the NAB argument is that the recent spread of the Delta variant only makes matters for smaller stations “more dire.” It points out that, unlike most industries that are regulated by the agency, broadcasters have no way to pass on the higher costs to its users.