The American Cable Association is petitioning the Federal Communications Commission to impose regulatory fees on DBS providers DirecTV (NASDAQ: DTV) and Dish Network (NASDAQ: DISH) equal to those currently charged to cable providers.
Currently, cable operators pay a regulatory fee to the FCC of about $1 per subscriber--a charge that dropped from around $1.02 per sub in 2013, when the FCC started charging Internet protocol TV (IPTV) operators regulatory fees.
Currently, DirecTV and Dish pay less burdensome regulatory fees as satellite operators, which amount to about 6 cents per every subscriber, according to the ACA. But they do not pay fees to the FCC as MVPD companies. The ACA estimates that per-subscriber fees paid by cable operators would drop to around 68 cents if the DBS companies were factored into the equation.
"Under the current system, DBS providers receive numerous direct regulatory benefits from the activities of the Media Bureau due to their status as MVPDs," notes a memo from ACA president and CEO Matthew Polka, along with various executives and attorneys for the group.
"Despite these extensive regulatory, policy, rulemaking and enforcement activities that [the FCC} engages in that concern and benefit all MVPDs, including DBS providers, DBS MVPDs pay no (zero) fees to cover these costs.," the memo adds. "In contrast, cable operators and IPTV providers will pay a fee of $1.00 per subscriber in 2014. Yet, the two DBS providers are the second and third largest MVPDs in the country, with DirecTV serving over 20 million subscribers and Dish Network serving over 14 million, in no small part due to the regulatory benefits they receive as MVPDs."
DirecTV and Dish Network have yet to release formal statements in response.
- read this ACA press release
More Aereo aftermath: ACA 'disappointed' by ruling, Diller says 'it's over'
ACA, NAB question growing industry consolidation in wake of AT&T-DirecTV merger news
ACA seeks FCC support against Viacom blocking online content