The FCC has decided to apply to IPTV companies some of the same regulatory fees that have long applied to cable operators.
The FCC is directed by Congress to assess fees on the companies it regulates to cover costs. The Commission decided that since IPTV providers benefit from the same regulatory framework that covers multichannel video programming distributors (MVPDs) they should be assessed per-subscriber fees similar to the fees paid by other MVPDs -- specificaly cable companies. To soften the blow, the Commission adopted a fee-increase cap of 7.5 percent.
The Commission stopped short in two instances.
It decided it will not classify IPTV companies as cable companies, which would subject IPTV companies to additional regulations that still apply to cable MSOs. AT&T, easily the largest IPTV provider in the U.S., was adamant about that. The FCC instead it widened its definitions; the relevant category is now “cable television systems and Internet Protocol TV service providers.”
The FCC also made no determination on whether direct broadcast satellite (DBS) providers should be similarly subject to the same regulatory fees, a measure some satellite rivals have been calling for, given that DBS providers are similarly considered MVPDs, and so fall within the same regulatory framework.
In its report, the Commission called its decision an interim measure, “the first step in comprehensively examining and reforming our regulatory fee program so that the fees paid by all licensees will more accurately reflect the cost of regulating them.” The Commission said its intent is to review whether or not DBS companies should be similarly assessed.
The decision was greeted mostly by silence in the industry, though American Cable Association commented.
ACA President and CEO Matthew M. Polka issued a statement that said, “IPTV providers offer a service substantially similar to cable service and are subject to, and benefit, from FCC Media Bureau regulation. Including IPTV service providers in the fee base will avoid distortions in the marketplace that can occur when some similarly situated competitors must pay regulatory fees while others can avoid them. We also greatly appreciate the FCC’s imposition of a cap on fee increases for fiscal year 2013, easing the burden on small cable operators.”
ACA encouraged the FCC to require DBS providers to also pay regulatory fees “on a per-subscriber basis as cable operators must,” saying such a measure would constitute regulatory parity.