The Federal Communications Commission (“Commission”) has released a series of items pertaining to its annual regulatory fee assessment and collection process, including: (1) the 2024 Regulatory Fee Notice of Proposed Rulemaking regarding agency-wide regulatory fee assessment and collection; and (2) a concise Space and Earth Station Report and Order on certain regulatory fees for streamlined small satellite and In-Space Servicing, Assembly, and Manufacturing (“ISAM”) operators stemming from the Space and Earth Station Fee Notice of Proposed Rulemaking. Together, these documents reflect the Commission’s continuing efforts to revamp its methodology for assessing regulatory fees in light of the demands the rapidly evolving space industry places on the Commission, as well as significant internal reorganization to help address those challenges. The TLDR: All current and future Space Bureau regulatees will be assessed significantly higher fees in FY 2024 than in previous years. All that is left to be determined is who will be responsible for what proportion? And how much will that be?
Industry and other affected stakeholders are strongly encouraged to participate in these regulatory fee proceedings, even if only to provide commentary on how the substantial increases in annual regulatory fees are expected to impact operations. Comment dates and filing guidance are provided below.
The 2024 Regulatory Fee Notice of Proposed Rulemaking
The 2024 Regulatory Fee NPRM proposes substantially higher annual regulatory fees for space and earth station payors than in FY 2023 and previous years. This is because FY 2024 marks the first year that satellite and earth station payors will come face-to-face with the monetary cost of the Commission’s 2023 internal restructuring which eliminated the International Bureau and replaced it with the Space Bureau and Office of International Affairs. The creation of the Space Bureau, and the hiring wave that followed, means that the Space Bureau is responsible for $42.14 million of the Commission’s annual recovery, as compared to the $30.32 million attributable to the International Bureau in FY 2023. The Commission must therefore collect from roughly the same number of Space Bureau payors significantly more than in previous years to cover the costs of the larger, dedicated bureau.
How the Commission will assess the fees among the satellite and earth station payors is contingent on the outcome of the on-going Space and Earth Station Fee proceeding. Released in March 2024, the Space and Earth Station Notice of Proposed Rulemaking expanded the discussion from recent years on how to best allocate regulatory fees amongst the various, and increasingly diverse, categories of space and earth station payors, while also determining whether the time is ripe to adopt new categories for novel technologies and short-duration missions. In addition to proposing changes that could be made to the existing allocation model, the Commission put forward a comprehensive “alternative methodology” for assessing space station regulatory fees that would eliminate all distinctions between space station payors (except for those licensed pursuant to the streamlined small satellite rules).
The Commission estimates that if no changes are adopted, current recovery will require it to roughly double the fee assessments for each call sign from FY 2023 to FY 2024 (see Appendix B). However, if any of the proposed changes in the Space and Earth Station Fee NPRM are adopted, fee assessments may vary substantially from current estimates (see Appendix E).
The Space and Earth Station Fee Report and Order
The Space and Earth Station Fee Report and Order is limited in nature, adopting two proposals set out in the Space and Earth Station Fee Notice of Proposed Rulemaking. First, it adopts a proposal to set the FY 2024 regulatory fee for NGSO small satellites at the level set for FY 2023 ($12,215), with annual adjustments in subsequent years to reflect the percentage change in Commission appropriation, unit count, and employee allocation percentage from the previous year. Second, it adopts a proposal to assess regulatory fees on ISAM at the same level as NGSO small satellites, regardless of the orbit in which they operate, on an interim basis.
Commenting on the 2024 Regulatory Fee and the Space and Earth Station Fee Rulemakings
The 2024 Regulatory Fee Notice of Proposed Rulemaking (establishing fee amounts) is an open proceeding with comments due July 15, 2024, and reply comment due July 29, 2024.
The comment deadline on the Space and Earth Station Fee Notice of Proposed Rulemaking (how the fees are divided among payors) has passed, however additional feedback may be submitted to the Space Bureau via ex parte now that the industry can see the impact of the fees on the proposals.
For any questions about FCC Regulatory Fees or guidance on how to file comments in the above referenced proceedings, please contact a Sheppard Mullin Telecom attorney below.