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CTIA Asks FCC: Don’t Double-Tax Wireless Providers

A few weeks ago, we submitted comments to the FCC on the assessment and collection of regulatory fees for fiscal year 2011. The Commission proposed to amend its schedule of regulatory fees to require wireless providers pay the Interstate Telecommunications Service Provider (ITSP) fees for the first time, in addition to the substantial per-subscriber regulatory fees wireless providers already pay as established by Congress. In other words, the Commission is proposing to double tax wireless providers.

As we explained in our comments, the Commission lacks both the legal authority and a valid policy justification for such a drastic revision of the regulatory fee framework. In Section 9 of the Communications Act, Congress stated that the FCC can only adjust their regulatory fees because of new laws or regulations that require changes in the number of manhours spent regulating them.

While ITSP fees have been declining recently, it is unfair and unlawful for the Commission to make up the shortfall on the backs of wireless companies and their customers. Congress intentionally placed wireless and wireless providers in different categories to prevent the imposition of both fees.

There are no changes in law or regulation that would allow the Commission to impose these new regulatory fees. Under the NPRM, wireless providers could potentially triple their regulatory fee burden. This is despite the fact that the current fees they pay would cover all of their regulatory manhours they require. Double-taxing wireless providers is not a fix for the Commission's shortfalls.

CTIA wants to make sure that new regulations on the wireless industry are considered very carefully, because regulatory costs are generally high. One only needs to look at the high regulatory costs which have driven our call for reform of USF and ICC; the creation of innovative account management tools; and our desire for regulatory flexibility in implementing the Accessibility Act.

The Communications Act does not permit the Commission to make up for shortfalls in one regulatory classification through increased fees on one or two other classifications. Such an approach would violate elemental notions of fairness, as it would place nearly the entire burden of remediation on wireless providers and ultimately, their customers. Instead, we urge the Commission to use the approach it adopted last year of increasing all other regulatory fees proportionately, which would be better and more defensible.

As CTIA and many others have suggested, the Commission should review its full-time employee equivalents (FTEs) by core bureau to make sure their fees are representative of their work they do on behalf of each communications sector. This would enable the Commission to address the full range of questions associated with its regulatory fee schedule, including those decreased revenues in any particular sector.

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