Small Operators Should Not Subsidize Their Much Bigger Satellite TV Competitors
PITTSBURGH, June 22, 2016 – The American Cable Association is calling on the Federal Communications Commission to require Direct Broadcast Satellite (“DBS”) providers, Dish and DirecTV, to pay more in annual regulatory fees so that cable operators, especially smaller ones, no longer pay fees at levels that effectively cross-subsidize their larger and more financially robust DBS rivals in the pay-TV market.
For the current fiscal year, the FCC is planning to require cable operators and IPTV providers to pay $1.00 per subscriber, while satellite TV giants Dish and DirecTV will be required to pay a baseline fee of just $0.24 per subscriber to help fund the Media Bureau’s regulatory oversight of multichannel video programming distributors (MVPD) with business before the agency.
“There is absolutely no basis for keeping the proposed DBS fee levels over 75% below those proposed for other entities in the Cable/IPTV category. DBS providers should be paying the same Media Bureau regulatory fee,” ACA President and CEO Matthew M. Polka said.
The fee disparity – which has persisted for many years – comes as AT&T last year became the largest MVPD in the country after acquiring DirecTV. Meanwhile, Dish is the fourth-largest MVPD with 13.9 million subscribers.
The DirecTV acquisition only exacerbated the folly of maintaining such wildly disproportional fee levels for cable, IPTV and DBS providers. AT&T operates two types of services – its U-verse IPTV service and its DirecTV DBS service. Yet, AT&T will be assessed starkly lower regulatory fees for its approximately 20 million DirecTV subscribers than it will pay for its approximately 6 million IPTV subscribers, even though all of these services make absolutely comparable use of Media Bureau resources.
For fiscal 2016, the FCC is proposing to collect $384 million in regulatory fees, an amount set by Congress. In the aggregate, the FCC expects cable and IPTV providers to share in paying $64.1 million in fees, compared to $9.1 million by DBS providers.
In comments filed on June 20, ACA proposed that if the FCC should decline to assess the same fee on all MVPDs for 2016, it should double the proposed DBS baseline fee for fiscal 2016 and bring DBS into full parity with cable and IPTV in fiscal 2017.
ACA stressed that fee parity among cable, IPTV and DBS is essential because the burdens placed on Media Bureau staff are similar, including such ongoing activities as implementing the Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA) and the Satellite Television Extension and Localism Act Reauthorization Act of 2014, and administering the program access and retransmission consent good faith rules. More recent relevant activities by the Media Bureau include implementation of the online public file and television closed captioning rules, which apply equally to all MVPDs.
ACA said that while the agency may have had reasons to set the initial DBS fee at a low level to avoid any potential for “rate shock,” it has now given DBS providers sufficient time to adjust. The DBS providers, ACA noted, have already had the benefit of an adequate phase-in and should now be brought either immediately or within one year to full parity with cable and IPTV.
Consistent with its prior advocacy, ACA also urged the FCC to ensure that wireless voice provider burdens on Wireline Competition Bureau (WCB) resources are reflected in its regulatory fee program. Today, wireless voice providers contribute nothing to support the work of WCB staff in regulating the provision of interstate voice telephone services, despite their use of WCB resources and the benefits accruing to the wireless voice providers from the work of WCB in administering the universal service program, numbering, pole attachment regulation, the Communications Assistance for Law Enforcement Act (CALEA), and other regulatory programs applicable to all regulated voice providers.
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 750 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA’s members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit https://acaconnects.org/