ACA, ITTA Argue With CTIA Over Proposed Regulatory Fee Shift to Wireless

In initial comments, ITTA said that wireline companies paid $128 million in regulatory fees, or about 40 percent of the FCC’s $340 million budget, which it called a "disproportionate" burden (see 1511100044). But in its reply comments, CTIA said it was “artificial to limit any such ‘fairness’ discussion to regulatory fees only.” Wireless providers contribute the most of any sector, 36.4 percent, to the commission’s overall budget when revenue from spectrum auctions is factored in, said CTIA, which said wireline providers cover 29.1 percent and media companies cover 26.3 percent of the agency's budget. Its calculation basically “reflected $106 million recovered through spectrum auctions and regulatory fees the FCC proposed to collect” in its 2015 regulatory fee order.

ACA said the Wireline Bureau activities not only support wireline “interstate telecommunications service providers” (ITSPs) but also wireless service providers. It said to ensure the Wireline Bureau activities are funded in a “fair and equitable, and competitively neutral manner,” the commission should identify the bureau costs to regulate wireless providers and revise the regulatory fees accordingly. ACA said CTIA filed the only comments opposing ITTA’s proposed shift. “However, nowhere in its comments does CTIA argue that [Wireline Communications Bureau (WCB) full-time equivalents (FTEs)] are not performing work for wireless providers,” ACA said. “Instead, CTIA engages in misdirection, avoiding the fundamental inquiry about whether WCB FTE’s are actually performing work for wireless providers.”

ITTA discussed with FCC officials the “burden borne by wireline voice providers and their customers and the need for the Commission to adjust its regulatory fee structure to reflect that” the Wireline Bureau’s work is no longer focused exclusively on ITSPs. “We expressed our continued support for the Commission to combine wireless voice providers into the ITSP regulatory fee category so that all voice providers pay regulatory fees on the same basis, and we advocated for a revenues-based approach for purposes of implementing the combined fee category. We also discussed other methodologies the Commission could utilize in calculating regulatory fees to reflect that the work of the Wireline Competition Bureau impacts multiple segments of the communications industry."

But CTIA said it’s time for the FCC to put an end to ITTA’s continued attempts to shift wireline sector regulatory fees to wireless providers. “The Commission should take this opportunity to once and for all deny ITTA’s repeated and unfounded call to add ITSP fees to wireless voice services and reject these other proposals,” the wireless group said.

CTIA said Section 9 of the Communications Act “affords clear -- but limited -- bases to modify the regulatory fee structure, which ITTA and ACA fail to meet.” It said ACA and ITTA incorrectly argue that USF programs “are solely covered by” the Wireline Bureau, “when in fact [Wireless Bureau] FTEs and the wireless industry contribute significantly to USF matters." CTIA also said wireless consumers and providers are the largest contributors to USF, paying 44 percent of its costs, “and thereby contribute heavily to defraying USF-related costs.” Other ACA and ITTA arguments are “simply wrong,” said CTIA. “The success and growth of the wireless industry cannot be the basis for changing the regulatory fee structure.”

CTIA also said the FCC can't “follow the spectrum” and reapportion Media Bureau regulatory fees to wireless broadband providers due to the incentive auction, as NAB suggested. CTIA said the statute requires regulatory fees to be assessed based upon the work conducted by agency staff, not the benefits to regulated companies. “CTIA believes that many broadcast stations will successfully participate in the incentive auction while remaining in the market, such as by channel sharing or voluntarily relocating in the TV band. Work conducted by MB [Media Bureau] FTEs post-auction will thus remain relevant for those incentive auction beneficiaries, as well as broadcasters that do not participate in the auction,” it said.

“Further, NAB erroneously jumps to the conclusion that fewer TV stations after the incentive auction will result in a decrease in MB activities, such as policy and rulemaking activity post-auction,” CTIA said. “There is no evidence that this will be the case. To the extent the workload of any of the core bureaus changes post-auction, it would be reflected in regulatory fees by an increase or decrease in the FTEs associated with each bureau."