The American Cable Association and the National Cable & Telecommunications Association have asked FCC to increase the amount of fees that satellite providers must pay per subscriber. The filing is in response to the FCC's Notice of Proposed Rulemaking and order that was issued in May in which the FCC said it wanted to charge satellite operators a per-subscriber regulatory fee, just as it does for cable and IPTV companies.
According to the filing, the ACA and NCTA said that satellite providers like Dish Network (NASDAQ: DISH) and DirecTV (NASDAQ: DTV) should pay more than 12 cents per subscriber. That rate is significantly lower than the 95 cents per subscriber that cable operators pay. The ACA and the NCTA want that 12 cents per sub fee raised to 24 cents per sub per year for 2015 and then increased another 24 cents per sub over the next three years until the satellite per-sub fees equal the cable per-sub fees in 2018.
NCTA and ACA have long advocated for direct broadcast satellite providers to have the same fee category as cable providers and to pay per subscriber, rather than per satellite license. However, the rates that the ACA and NCTA have proposed are more aggressive than the 12-cent fee the commission proposed.
The FCC in May ordered that Dish and DirecTV be added to the same fee category as cable, but then the commissions asked for comments on its proposed fee, including whether the proposal should start low--1 cent per month--and gradually increase. The phased increase is intended to address satellite operators' argument that the existing fee schedule would cause consumer bill shock.
Satellite operators also say they generate fewer regulatory costs than cable companies. "DBS generates nowhere near the regulatory costs of cable," the companies told the FCC in December. "Cable is subject to a variety of regulation that does not apply to DBS. Cable is the dominant (and growing) provider of broadband services and is thus subject to a panoply of regulation that does not apply to DBS. Cable remains the dominant provider of video and is thus subject to competition-based regulation that has never applied to DBS."
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