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ACA: Dish and DirecTV’s Opposition To Minor Increase In FCC Regulatory Fees Lacks Merit

Cable Customers Paying 150% More Than DBS Deserve Relief

PITTSBURGH, July 10, 2017 -  The American Cable Association called on the Federal Communications Commission to move forward with plans to raise Direct Broadcast Satellite (DBS) regulatory fees by a slight amount, disputing AT&T/DirecTV and Dish Network's flaccid claims that the proposed increase will harm consumers and lacks justification.

"AT&T and DISH have provided no basis for the FCC to withhold from increasing the fee level assessed to the DBS providers for fiscal 2017. The proposed increase will not harm DBS subscribers. It is also justified given DBS providers participate in and benefit from the Media Bureau's multichannel video programming distributor (MVPD) proceedings and other activities on par with cable and IPTV providers," ACA President and CEO Matthew M. Polka said.

The FCC plans to fund its fiscal 2017 budget by collecting $356.7 million in fees from regulated entities, including cable operators, DBS/satellite TV providers, TV stations, voice telephony providers and satellite operators. For fiscal 2017, the FCC wants to raise the DBS contribution by 11 cents to bring this fee category closer to parity with the cable/ IPTV provider fee category.  With this DBS fee increase, cable/IPTV providers will still pay 150% more than DirecTV and Dish per subscriber -- or 96 cents for cable/IPTV compared to 38 cents for DBS annually.

DirecTV and Dish are protesting the FCC's gradual effort to establish fee parity, claiming the fee increase will produce consumer harm.

ACA, in comments filed with the FCC on July 7, said the DBS providers' objections lacked merit, adding that if the entire 11 cents is passed through, the increase would amount to less than one cent per month, per subscriber. At a time when DISH and AT&T affiliate DirecTV just increased their customers' fees by $5 per month and $2-$8 per month for 2017, respectively, their claims that a less than one cent per month regulatory fee increase is harmful rings hollow.

ACA noted that the public interest benefit of establishing regulatory fee parity between cable/IPTV providers and DBS is rooted in competitive fairness in that it would avoid one competitor from subsidizing another - a concept that AT&T embraced before it completed its acquisition of DirecTV two years ago this month. Any alleged harm to DBS from a slight bump in regulatory fees would be more than offset by the public interest benefit of lower regulatory fees paid by tens of millions of cable and IPTV subscribers combined.

ACA also urged the FCC to disregard arguments that the DBS fee increase is unjustified because AT&T and Dish engage the FCC Media Bureau staff on regulatory matters to a lesser extent than do cable and IPTV providers.

ACA said its filings have demonstrated that all payors in the Cable/IPTV fee category have imposed and continue to impose similar burdens on Media Bureau resources used to administer MVPD regulation, have received and continue to receive similar regulatory benefits in their provision of MVPD services, and therefore should be assessed similar regulatory fees to support Media Bureau MVPD activities.

Lastly, ACA said the FCC should continue to reject arguments by the DBS providers that the agency lacks the authority to assess regulatory fees on DBS providers in their capacity as MVPDs. Regarding their new assertion that there is no legal foundation to support parity in the fees paid by DBS and cable operators, the FCC should reject this claim out of hand.

"Increasing the DBS fee to achieve full regulatory parity with cable and IPTV payors would be consistent with the FCC's goal to distribute more equitably regulatory fee burdens among FCC licensees, and the FCC should take this step," ACA's Polka said.

About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 750 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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