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ACA: FCC Needs To Boost DBS Regulatory Fees

Parity With Cable Within Three Years Should Be Goal, Groups Say

PITTSBURGH, July 7, 2015 - The American Cable Association is urging the Federal Communications Commission to establish regulatory fee parity between direct broadcast satellite providers (DBS) and cable and IPTV providers within three years to ensure the burden of supporting the FCC's Media Bureau is distributed fairly among all types of multichannel video programming distributors.

Although the FCC is requiring Dish and DirecTV to pay Media Bureau-related regulatory fees for the first time, the agency is proposing a DBS fee of just 12 cents per subscriber, per year.  Meanwhile, the FCC is planning to seek 95 cents per subscriber, per year from cable and IPTV providers, nearly eight times the DBS level.

"ACA believes that the FCC's fee proposal is unfair, especially to smaller cable operators that need relief from the unfairness of the current regulatory fee regime that requires them to cross-subsidize their much larger, direct competitors' use of Media Bureau staff resources.  The FCC should level the playing field within three years and ignore red herrings issued by Dish and DirecTV on the matter of consumer rate shock," ACA President and CEO Matthew M. Polka said.

ACA's views were set forth in FCC comments jointly filed Monday with the National Cable & Telecommunications Association (NCTA).  While the cable trade organizations appreciate the FCC's decision to require Media Bureau support from Dish and DirecTV, they explained in their comments that there was no support in the record or a reasoned explanation for proposing to set the DBS rate so disproportionately low in the first year.

ACA and NCTA instead asked the FCC to set the DBS fee at 24 cents this year and raise it to 72 cents within three years, which should approximate the cable and IPTV fee burden at that point.

The trade groups said ramping up DBS fees would not invite rate shock as suggested by Dish and DirecTV. A 24 cent fee this year would increase rates for the lowest-priced DBS subscriber by only one-tenth of one percent (0.1%) per year and by only two hundredths of a percent (0.02%) per year for an average DBS subscriber.

"The per-month cost for an average DirecTV subscriber would increase from $107.27 to $107.29 in the first year and to $107.33 when the fee is fully phased-in.  It seems unlikely that most DBS subscribers would consider such relatively minor increases as creating ‘rate shock' for them," Polka said.

About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 850 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business.  For more information, visit http://www.americancable.org/


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