While the FCC’s proposed $1.3mln increase in annual regulatory fees isn’t earth-shattering, NCTA is taking issue-not so much with the rise, but with the fact DBS doesn’t have to pay nearly as much. A Tues filing was noteworthy in that it’s the 1st time NCTA has raised the issue of fee disparity. The cable industry paid about $46mln in fees in ’04, while DirecTV and EchoStar forked over some $2mln. Why the disparity? Cable operators pay fees on a per sub basis, while DBS providers pay a facility-based fee based on geostationary space stations ($114,625/station). The FCC wants to increase this year’s cable fee to 72 cents/sub from 70 cents/sub in ’04. "There are mid-sized cable operators serving a fraction of the customers served by DirecTV and EchoStar that pay annual regulatory fees close to or more than what these companies pay," NCTA said. Mediacom paid $1mln last year for 1.5mln subs; Insight paid $891K for 1.3mln subs. Cable regulatory fees have increased nearly 49% from ’00 to ’04, while fees for DBS from ’00-’03, but decreased in ’04. NCTA wants the FCC to apply a per sub fee to DBS, arguing that a facility-based fee no longer holds given how dramatically DBS has changed, how cable has been deregulated and how there is a solidly competitive video marketplace. Under current rules, DirecTV and EchoStar would pay about 8 cents/sub in fees this year vs 72 cents/sub for cable, NCTA estimates. "Incongruously, as DBS has gained [subs] on cable, the government has imposed a heavier and more discriminatory fee burden on cable systems," NCTA said.

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