D.C. Memo: Google's 'Fee Ride' Continues at the FCC

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Google's Fee Ride: On Friday, the FCC released an order telling communications companies what they will owe in fiscal 2024 regulatory fees to cover the agency's $390.1 million budget. The fees will be due within a matter of weeks. With regard to pay-TV, the FCC expects to collect $63.5 million from a category called "cable TV systems, including IPTV & DBS." That will certainly capture a big segment of the pay-TV industry – including Comcast and Charter from cable, and DirecTV and Dish from satellite – and each company will owe the FCC $1.27 per subscriber, up 3.25% from the prior year. Meanwhile, Google's YouTube TV will not have difficulty calculating its FCC regulatory burden: It's zero dollars and zero cents. YouTube TV, and all the other streamers that look like cable TV, are exempt from paying fees. According to MoffettNathanson, YouTube TV had 8 million subscribers at the end of 2023. If YouTube TV had to pay cable's $1.27 regulatory fee, Google would owe the FCC at least $10.1 million – about 2.6% of the agency's budget. The FCC's fee structure has numerous disparities, including the backdating of the fee burden. "Regulatory fees must be paid for the number of basic cable television subscribers as of Dec. 31, 2023," the agency said. That will mean that – based rampant cord cutting that continued into 2024 – Comcast, Charter, DirecTV and Dish will owe the FCC about $3.6 million combined on the 2.8 million subscribers that they collectively lost in just the first two quarters of 2024. YouTube TV added 50,000 subscribers in the second quarter. MoffettNathanson predicts that in 2026, YouTube TV will overtake Comcast and Charter to become the No. 1 pay-TV provider with 12.4 million subscribers.