WASHINGTON-The General Accounting Office, the investigative unit of Congress, is looking into the internal controls of how the Federal Communications Commission collects regulatory fees, the GAO confirmed last week.
Regulatory fees are a separate assessment from filing fees. Regulatory fees go to offset congressional appropriations, and filing fees are sent to the general treasury.
Angela Giancarlo, director of federal regulatory affairs for the Personal Communications Industry Association, welcomed the GAO probe. “It would be helpful to all parties-the FCC, Congress and the industry-if there was a spotlight put on the process,” Giancarlo said.
The investigation was revealed earlier this month when FCC Chairman William Kennard was questioned about the collection of fees by Rep. Harold Rogers (R-Ky.), chairman of the House Appropriations commerce, justice, state and judiciary subcommittee.
Rogers specifically was concerned about what the FCC was doing to collect more than $1 million in back fees. FCC Managing Director Andrew S. Fishel confirmed in the hearing that the FCC was attempting to collect the fees.
Entities that do not pay their regulatory fee assessment can be subject to a penalty of 25 percent. While some notices to non- or late-payers are sent out en masse, most receive individual notices from the FCC.
The GAO investigation is being conducted at the request of Sen. Susan Collins (R-Maine), chairman of the Senate permanent subcommittee on investigations.
The probe may be the result of an investigation GAO conducted last year for Collins into slamming, the unauthorized switching of long-distance carriers. During that investigation, GAO set up a fictitious long-distance reseller, filed papers with the FCC to conduct business, but did not pay the $600 filing fee. The FCC has not attempted to collect that filing fee even though the tariff filed by the fictitious company-PSI Communications-was accepted.
The GAO expects to deliver a report on its investigation into the FCC’s internal controls on regulatory fees by July 15, said Ned Griffiths of GAO’s Public Affairs Office.
If the FCC can’t collect filing fees, it may not be able to collect regulatory fees or assess whether the fees it collects are being reported correctly to Congress. This could impact appropriations, which in turn impacts the amount of fees assessed.
If the regulatory fee assessment goes up because of shoddy bookkeeping, it also could give credence to a complaint from the wireless industry, which says its assessment is too high and inaccurate.
Indeed, the Cellular Telecommunications Industry Association submitted comments to the FCC, which said the proposed fee for the 1999 fiscal year was overcalculated by $8 million. PCIA similarly grumbled about the fee assessment for fiscal year 1998.
The FCC would not comment on the investigation.
Congress told the FCC to collect 6 percent more for FY 1999 than it collected for FY 1998. Regulatory fees amount to approximately 80 percent of the FCC’s annual budget.
The FCC recently asked Congress to allow it to raise its regulatory fee assessment for FY 2000 to pay for an automated licensing system. The FCC believes licensing automation will help it carry out its regulatory functions so the system should be paid for by regulatory fees.
“Without adequate automation funding, the [FCC] will be unable to carry out our basic functions of awarding licenses to applicants for communications services, overseeing the implementation of new services for the public, and reviewing and updating existing rules and regulations … Since the automation enhancements will directly benefit the [FCC’s] licensees, we propose that all of this increase be paid for by an increase in regulatory fees,” Kennard said.
CTIA’s problem with the FY 1999 assessment is that the FCC used 1998 subscribership numbers (55 million) and set the assessment at 32 cents per subscriber. If the FCC had used the 1999 subscribership numbers (69 million), the assessment would be 20 cents per subscriber, CTIA said.
FCC officials say it is difficult to determine wireless subscribership because unlike wireline carriers, wireless carriers do not file this information with the FCC, so it must rely on industry estimates.
Some have suggested regulatory fees be charged based on revenues rather than number of subscribers. This, and other suggestions, have been made many times during the inevitable comment cycles the FCC goes through when assessing regulatory fees.
Since the FCC seems set in its assessment-collecting way, perhaps the wireless industry should look to Congress to tell the FCC a better way to collect the fees. Although PCIA does not have present plans to ask for such congressional direction, Giancarlo indicated such lobbying could occur in the future.
“Perhaps Congress is the place to pursue it,” she said.
Washington Bureau Chief Jeffrey Silva contributed to this report.
