How would you benefit from a $50 license fee?

Yes and no.

1) FCC doesn't plan to charge for name and address changes, nor cancellations, so the cost of those has to be carried by the chargeable transactions.

2) It is not clear exactly how FCC does their accounting when it comes to the ARS. There's direct labor, additives (benefits and other costs), overhead (office space, expenses), and the cost of the computers, utilities, internet connections, etc. Also the added cost of collecting the fees, which they don't do now.

Still, $50 for a renewal done and paid for online every 10 years seems kinda high.

 

Okay, thanks to pocket calculator:
2087 hours per employee X 4 applications per hour= 8,348 applications per year
150,000 applications divide by 8348 = 18 employees needed
$67,000 per employee times 18 = $1.2 million total FCC cost
But they would be collecting 150,000 times $50 = $7.5 million revenue

 

2087 hours per year means no holidays, vacations, sick time, or training.

$67,000 per employee?

What about costs other than direct labor?

 

Indeed, if you have ever put together a budget in the public or private sector you know to include other operating expenses in addition to salary and wages. Costs for things like training, health care, pensions, etc. are also part of the total bill.

 

We need to remember that the FCC is basing their fees solely on "direct labor costs", so those are the numbers we need to use.

 

If you read the NPRM, the FCC lays out how the costs are calculated. They are basing the fees solely on direct labor costs, anything else does not factor into their computation of the fee.

We can argue all day about what an FCC employee is paid. I have demonstrated that the amount proposed would be enough to cover labor for 36 employees, each making $85,000 per year, and an additional 20% added on. The 20% added on figure comes directly from the NPRM, so while it may not be realistic, it is supposedly what the fees are based on.

Does anyone think that it takes 36 high paid employees, working full time, to process new applications and renewals? Does anyone think it takes an hour per application, under these conditions to process each and every application?

 

But the fee or tax is not "voluntary", it is "compulsory". The act underlying the fee or tax may be voluntary, but the tax is not. Under this definition, almost all taxes and fees are "voluntary", since taxes and fees are based on us "doing something". If I buy tires for my car, there are taxes that have to be paid. But those taxes are not "voluntary" simply because I may or may not choose to own a car.

 

"Direct labor cost
May 08, 2019
Direct labor cost is wages that are incurred in order to produce goods or provide services to customers. The total amount of direct labor cost is much more than wages paid. It also includes the payroll taxes associated with those wages, plus the cost of company-paid medical insurance, life insurance, workers' compensation insurance, any company-matched pension contributions, and other company benefits."
https://www.accountingtools.com/articles/what-is-direct-labor-cost.html

 

This is from the NPRM:



So, it specifies exactly what is being counted, and what is not be counted as far as their estimates. Their estimates are based on the hourly wages of the employees doing the job, including first level supervision.

The last line is interesting, and where we, as hams, can make an impact. "we seek comment on the changes to the application fees and whether they reasonably reflect current costs of application processing."

I would submit that these costs are way off, not even in the ballpark. We need to remember that the vast majority of new licenses and renewals are done electronically, the FCC has very little labor input to process them.

For example, when you renew your license online, there is no human intervention in that process. None. When you take a test for a new license, the VEC forwards a file to the FCC to process. Those files are done in batches, so one employee may be filing all of the new applications received that day. It may take a couple of minutes to do this, but that is for all of the licenses, not just one. Some of these applications are "kicked out" for offline review, but that initial sorting process is done automatically, by matching the application names to some "list" that deserves scrutiny. Those "offlined" applications are the only ones where any sort of time is required to process them. Now, an FCC employee has to determine if you match the "list", or if your name is similar, but you are a different person. They don't hire private investigators to do this, they have resources to find out if you match through database searches, etc.

So, the amount of time per application is minimal, maybe averaging one minute per application. But the amount requested indicates that they are allocating one hour of time to process each application, and that it is being done by an employee making $85,000 per year.

 

"We estimate labor cost per hour for the various general schedule pay grades of the employees that process applications based on the 2020 federal government pay table for Washington DC, at the step 5 level, as we currently do under our Freedom Of Information Act rules;27 we estimate overhead costs at 20% of the salary level also per that rule, and we estimate each employee works 2,087 hours in one year. We also round each fee to the nearest $5 increment, as required b