FCC Revamps Regulatory Fees Paid By Submarine Cable Operators
The FCC ordered a long-awaited overhaul of regulatory fees for submarine cables. The 3-0 decision, released Tuesday, creates a new fee for operators of the cables to pay instead of the international bearer circuit fee that they have owed. The order doesn’t affect fees paid by terrestrial and satellite operators. Industry applauded the decision, which fell off the sonar late last year when Kevin Martin was the commission’s chairman.
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The new system “better reflects today’s marketplace,” said acting Chairman Michael Copps. The three commissioners called the order overdue. The FCC had promised to complete the order last fall, Commissioner Robert McDowell noted, thanking Copps “for bringing this forward promptly.” The order was released under a commitment by Copps to move forward on items that the commissioners agree on at least broadly.
Starting this fiscal year, which began Oct. 1, the FCC will charge operators a flat fee for each cable landing license, the order said. The fees will be the same for common carriers and other companies. Fees previously were charged for each active circuit. The new method allows operators to add capacity to cables without having to pay a regulatory fee for each additional circuit, the commission said. “The regulatory fee would become smaller on a per circuit basis as a cable’s capacity is increased.”
The FCC based its order on an industry proposal from AT&T, Verizon, Level 3 and several private submarine cable operators. The group represented 35 of 42 operators, accounting for more than 95 percent of international circuits carried on submarine cable systems, the agency said. The plan has had no opposition in the industry or on the commission since September. FCC staff wrote an order last year, but Martin never circulated it. Other commissioners didn’t know a draft existed until Copps became acting chairman (CD March 12 p8).
The change in FCC management revived the submarine cable issue, Level 3 Vice President Bill Hunt said. Industry supporters of the plan had been asking the FCC about the progress of an order since submitting their proposal, but they found out nothing while Martin was in charge, he said. After becoming acting chairman, Copps “opened the windows of communication” among bureaus and the eighth floor, Hunt said. Industry supporters were quickly informed that the order had been stuck in the International Bureau and would soon be circulated among commissioners, he said.
“This common sense decision fosters greater market stability and ensures that carriers and consumers will not be required to pay exorbitant government fees for Internet, data and voice traffic exchanged on undersea cables,” Hunt said. “Global commerce, education and technology will benefit from this decision.”
Verizon is “pleased the FCC has acted,” a spokesman said. The industry group’s approach aimed to “realign fees on a competitively neutral basis that better reflects the structure and capacity of today’s cable systems,” the spokesman said. “Having a streamlined and updated methodology for the collection of these fees is an important part of connecting the U.S. to the rest of the world.”