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A regulatory fee is an annual FCC fee used  to recover the annual costs of its enforcement, policy and rulemaking, user information, and international activities. [47 U.S.C. 159 (a). 47 U.S.C. 159 (b) (1) (A) and 47 U.S.C. 159 (g).] 

The regulatory fees do not apply to government entities, amateur radio operator licensees (other than amateur vanity call signs), and non-profit entities.

An application fee is an Congressionally established fee that the FCC collects and passes on directly to the U.S. government. Application processing fees are deposited in the U.S. Treasury and are not available to the Commission.

Application fees are established under 47 USC Chapter 5, Sub-chapter I, Section 158 are not applicable (A) to governmental entities and nonprofit entities licensed in the following radio services: Local Government, Police, Fire, Highway  Maintenance, Forestry-Conservation, Public Safety, and Special Emergency Radio, or (B) to governmental entities licensed in other services.

It is sometimes confusing for a non-profit (501c) organization, because they are exempt from regulatory fees, but only from application fees if they are licensing channels from the Public Safety Pool of channels.  The same non-profit organization, if they are attempting to license a frequency out of the Business Pool must pay the application fee.

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