WASHINGTON-Wireless carriers this week will be writing checks-big checks-to the Federal Communications Commission to pay statutorily required regulatory fees.
Regulatory fees finance approximately 80 percent of the FCC’s operating expenses. These fees, set each year by Congress, have been increasing steadily to the dismay of the Personal Communications Industry Association. “The FCC delivered yet another blow to competition and to American wireless consumers with its unfounded regulatory fee increases,” said PCIA President Jay Kitchen when the FCC released its current assessments in June.
PCIA is skeptical the wireless industry should be paying as much as it has been assessed because work on licensing applications should not be charged to regulatory fees.
“It is puzzling to us that CMRS (commercial mobile radio services) fees have increased 93 percent [even though] most of the [wireless] work that is done is licensing … On the other hand, fees for the wireline [industry, which] has no licensing issues, have only increased 25 percent. Why would the rates go up so much more [on wireless] than on a heavily regulated industry? It distorts competition between wireless and wireline,” said Cindi Thomas, PCIA director of regulatory affairs.
The FCC has a different view. While the agency acknowledges licensing issues are not supposed to be financed by regulatory fees since license applications pay a separate fee, substantive policy issues related to a particular license can be charged to regulatory fees. “The actual application processing [is not charged], but some of the substantive questions would be charged,” said one FCC source.
Recently, the FCC implemented an automated cost accounting system that PCIA believes may not be accurate. This system details what each FCC employee worked on throughout the day in much the same way private consulting firms or law firms keep time. PCIA has tried to work with the FCC to “ensure the coding is proper. If that is wrong, then the equation is wrong,” Thomas said. These efforts seem to have fallen on deaf ears. The FCC has used the same fee schedule for the last two years.
The FCC acknowledged there could be some errors with the system. “Our cost accounting system is only as good as the people who use it,” said one FCC official.
But, while the FCC admits there could be problems, it has been scrupulous in watching the coding on wireless, agency sources said, noting auction work is given special coding because the FCC is reimbursed from auction winnings for the cost of running the auction.
In addition, the FCC believes its cost coding system is “pretty finite” and there is little chance non-wireless issues would be charged to wireless carriers. The agency admits agency officials outside of the FCC’s Wireless Telecommunications Bureau could charge work to wireless codes if they work on wireless issues, thus increasing the assessment to wireless carriers.
Regulatory fees also impact customers because most wireless carriers pay their assessment and then turn around and charge their customers to recover the bill.
