Satellite Industry and Broadcasters Concerned About Space Bureau Reg Fee Shock

Satellite operators and broadcasters want the FCC to phase in Space Bureau regulatory fee increases, expand the payor base and maintain COVID-19 pandemic regulatory fee relief measures, according to comments filed by Monday's deadline in docket 12-108. Satellite interests repeatedly warned of fee shock, particularly as the FCC proposes big jumps in fees to cover costs associated with last year’s creation of the bureau (see 2304110002). The agency should “maximize fairness in the payment process” by continuing “the availability of the extraordinary relief measures for financially distressed regulatees,” a joint filing from state broadcast associations said.

In the comments, satellite interests repeatedly argued for phasing in or otherwise ameliorating the big hikes contemplated in the FY 2024 fee proposal. The FCC should defer and/or phase-in “such extreme fee increases” as those being proposed “to help payors meet their regulatory fee obligations without undue financial strain,” the Commercial Smallsat Spectrum Management Association said. It pointed to an operator in the “less complex" operator category that paid $130,407 in regulatory fees in FY 2023 and is potentially facing a $456,386 bill in FY 2024.

Intelsat deemed it “unreasonable and unfair to allow the creation of a bureau that seeks to ‘promote a competitive and innovative global telecommunications marketplace via space services’ to result in the doubling of regulatory fees for this industry in a single year.” Intelsat called for a cap in indirect full-time equivalents (FTEs) assigned to the bureau at 1% for FY 2024 and 20% annually after that until the bureau’s allocation reaches what the FCC calculates is needed -- roughly five years. That “would more equitably balance the regulatory fee impact of the Space Bureau’s creation in a fair, administrable, and sustainable manner for all payors,” it said. Tomorrow Companies also argued it faces a fee hike not commensurate with the level of oversight “less complex” operators require.

The bulk of FCC NGSO regulatory activities concern items raised by and tied to larger systems, and they should carry a larger fee burden, BlackSky Global said. It said nothing in the record supports the “enormous shift” in regulatory fee burdens that the FCC is contemplating, with “less complex” systems in FY 2023 paying a little more than a third of the fees other NGSO systems were charged. FY 2024’s proposed methodology bumps that to roughly two-thirds. Eutelsat/OneWeb urged a minimum 20%/80% allocation of Space Bureau regulatory fees between earth station and satellite licensees and a 60%/40% allocation of the satellite regulatory fees between GSOs and NGSOs. It also called for creation of more NGSO “other” tiers that reflect smaller constellations and constellations of more than 1,000 satellites.

The bureau's creation means a dramatic jump in fees for licensees, but the FCC has the authority to reduce per-licensee fees in light of that, Myriota said. Such a reduction would apply only to the FY 2024 fees but would let bureau licensees start planning and budgeting for the new scale of regulatory fees, it said.

Kineis argued against levying FY 2024 regulatory fees on nonoperational satellite networks. It said its proposed non-voice non-geostationary mobile satellite service system would be the operational equivalent of two to three single smallsat operators, so it shouldn’t pay more than triple the fee assessed for a smallsat network. It said it “cannot fathom” how it makes sense that Kineis could face fees as much as 54 times what is proposed in the smallsat category.

Iridium backed the FCC’s FY 2024 fee proposal, despite the steep hike, but said that starting with FY 2025, the agency should adopt a fee approach where operating and authorized satellite systems pay regulatory fees and GSOs and NGSOs pay based on “units” of individual GSO satellites or 500- or 1,000-satellite groupings of NGSOs. That would make fees more consistent, as small variations in the number of satellites wouldn’t affect the fees an operator owes, Iridium said.

Satellites primarily performing rendezvous and proximity, on-orbit servicing and orbit transfer operations should be included under the FCC’s proposed $12,215 FY 2024 regulatory fee for small satellites, Astroscale said.

Broadcasters Weigh In

Broadcast groups also discussed the price shock from FTE reallocations connected with the bureau's creation. The fees for earth stations will increase significantly under the proposal, the state broadcast associations said. Broadcaster-owned earth stations should have their own category, the state associations said. The FCC “should recognize the very different benefit that broadcasters derive from a single or small number of transmit earth station antennae per authorization versus the benefit that holders of blanket authorizations for hundreds or thousands of antennae receive,” the state associations said. NAB said it can’t determine how the FCC calculated its proposed fees. “NAB is unable to comment on whether the increase is appropriate under the Commission’s existing methodology,” because of “conflicting statements” in the reg fees NPRM and the Space and Earth Station Regulatory Fees NPRM, the trade group said.

Broadcasters told the agency that they agree with the rates for TV and radio stations proposed in the regulatory fees NPRM but said the agency should expand its payors base. For example, it should collect fees from companies that profit from FCC proceedings but don’t hold FCC authorizations, the state broadcast associations said. That could include non-U.S. electronic equipment manufacturers or the makers of devices that use unlicensed spectrum, the joint filing said. NAB said the agency should continue reviewing the methodology for calculating direct and indirect FTEs for each bureau. Indirect FTEs are funded by regulatory fees from all FCC licensees, while only the licensees of a particular bureau are charged fees based on its direct FTEs. “It is essential that core bureau FTEs that benefit some, but not all, fee payors remain direct and are distributed among those regulatory fee categories that benefit from their activities,” NAB said. It also urged the FCC to reconsider a decision classifying Universal Service Fund FTEs as indirect because broadcasters don’t derive benefit from the USF.

Both NAB and the state broadcast associations oppose the FCC’s proposal that ends regulatory relief measures for broadcasters that began during the COVID-19 pandemic. The policies make it easier for broadcasters to request financial hardship relief from reg fees. “Erecting barriers to relief is not in the public interest, particularly where the most likely result is not the Commission’s collection of more regulatory fees, but reduced broadcast service to the public,” the state broadcast associations said. The reg fee NPRM “does not suggest that broadcasters are exploiting this policy, and it is difficult to understand the Commission’s rationale for eliminating a policy that serves only to help silent stations get back on the air,” NAB said. The FCC’s processes “should err on the side of supporting distressed payors’ ability to continue to serve the public,” the state groups said.