Industries Slam NAB Call for Expanded FCC Regulatory Fees

Collecting regulatory fees from tech companies and users of unlicensed spectrum would be a huge task, outside FCC authority, and hamper broadband adoption, said trade associations and others in comments posted to docket 21-190 by Thursday’s deadline.

Virtually every filing opposed NAB’s calls for the FCC to expand the payor base for regulatory fees. Unlicensed devices are “so ubiquitous” that creating a system to collect their fees and survive judicial scrutiny “would cost more than it would collect,” said Public Knowledge, the New America Foundation’s Open Technology Institute and others in a joint filing echoed by CTA, NCTA and many additional organizations.

The FCC “cannot lawfully turn a blind eye to the fact that Big Tech -- companies such as Facebook, Google, Microsoft, and Amazon -- take up significant Commission resources” but “pay no associated regulatory fees as a result,” said NAB. Broadcasters also want dedicated fees for broadband providers, a higher threshold for "de minimis" fees and for the FCC to analyze how its fees relate to the services it performs. The FCC’s “listless approach to regulatory fees” causes broadcasters to pay “$3.5 million for administering the USF program, a program from which they receive no benefit whatsoever,” NAB said.

Virtually the only commenter on expanding regulatory fees that didn't condemn proposals to expand regulatory fees was USTelecom, which also declined to endorse the idea. It's “appropriate” for the FCC “to consider ways in which the landscape of the telecommunications industry has changed,” said USTelecom.

“While the primary target of any effort to saddle unlicensed users with annual regulatory fees may be ‘Big Tech,’ there are millions of unlicensed devices” that would be swept up by fees for unlicensed spectrum users, said the Wireless ISP Association. Hearing aids, tire pressure sensors in cars, wireless smoke alarms, remote controls and a host of IoT devices use unlicensed spectrum, said filings from the Hearing Industries Association, Association of Home Appliance Manufacturers, and Alliance of Automotive Innovation. FCC activities on “the management of license-exempt (LE) spectrum are extremely small when compared to management of licensed spectrum, and when spread across the vast number of devices using this band would result in fees that are uneconomic to collect,” said the Low Power Radio Association.

“Broadcasters entirely ignore the reality that they themselves are among the largest beneficiaries of the value unleashed by use of unlicensed spectrum,” said the joint filing from PK and others, citing streaming services owned by networks such as Hulu. The proposal “would sweep in all NAB members, as well as manufacturers and retailers of television sets and equipment used by broadcasters,” they said.

Charging fees based on every sort of unlicensed spectrum device shouldn’t be the proceeding’s goal, said NAB. “While there may be good policy reasons for not imposing fees on every small appliance and other home good equipment manufacturer,” it “makes little sense to delay imposing regulatory fees on Big Tech companies that actively participate in Commission proceedings,” said NAB. The FCC could look to proposed congressional legislation for guidance on how to target fees to only big tech companies, NAB said. “Any efforts to narrow the scope of the proposal would almost certainly fail due to the nearly impossible challenge of precisely defining the category of new payors in a predictable or nonarbitrary way,” said the Information Technology Industry Council.

Many companies that use unlicensed spectrum don’t interact with the FCC at all, and many devices use both licensed and unlicensed spectrum. Sorting through and determining what entities should be charged for what would be an extremely difficult task, said a joint filing from the Telecommunications Industry Association, ACT Online, Association of Equipment Manufacturers, Power Tool Institute and numerous others: “We question whether the FCC can effectively identify equipment subject to potential new regulatory fees, let alone police a previously free, unregulated aspect of billions of existing devices.” Many companies that build unlicensed devices already finance FCC operations through the fees for device authorizations, said WISPA and the Association of Home Appliance Manufacturers.

The FCC “cannot simply throw up its hands and proclaim that it is too hard” to correctly assign regulatory fees, said NAB.

Nearly every commenter said expanding regulatory fees to unlicensed devices is outside FCC authority. NAB said a U.S. Court of Appeals for the D.C. Circuit ruling -- Telesat v. FCC -- on fees for foreign satellite companies paves the way to charge companies that benefit from FCC action, but that's “a notion that lacks any limiting principle,” said TechFreedom. NAB’s reading is “too expansive,” said Wi-Fi Alliance. The FCC can collect fees only from entities it regulates, said TechFreedom. “Otherwise, the FCC’s taxing authority would be unlimited, and every connection to the Internet should come with a coin slot.” Unlicensed spectrum is a general benefit the FCC isn’t allowed to use to assess fees against a specific payor, said the PK joint filing.

The FCC "should avoid creating a new 'Wi-Fi Tax' using definitions that would be overly broad and unworkable or arbitrarily narrow," said a joint filing from Incompas, CCIA, the Digital Media Association and Internet Association.

Charging regulatory fees to companies in the unlicensed space would suppress innovation and have a chilling effect on the expansion of broadband, said CTA, NCTA and others. “NAB’s proposal would undermine the enormous innovation made possible by the Commission’s long-running and successful approach to unlicensed spectrum,” said CTA. “Startups are particularly ill-equipped to handle new or increased regulatory fees,” said startup association Engine. “Unlicensed spectrum uses are adding value to consumers’ lives daily and are part of the ecosystem stimulating broadband deployment,” said NCTA.

By not specifically calculating how much time noncore bureaus such as Consumer and Governmental Affairs spend on a given industry’s matters, the FCC’s methodology leads to regulatees paying for services that don’t benefit them, said NAB, calling it “gross inaccuracy and frankly, laziness.” “Rather than do nothing, the Commission should undertake an accounting of the actual functions performed by FTEs [full-time equivalents] in the noncore bureau and offices,” NAB said. “There is no question that the Commission’s primary focus is ensuring that broadband service is available,” said NAB. “There is no logical explanation as to why the Commission should not add a fee category for broadband providers.”