Beyond Auction, NAB Eyes Impact of Repack - Broadcasting & Cable

Beyond Auction, NAB Eyes Impact of Repack

Broadcasters’ group cites potential moving expenses, tight time frame
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Some broadcasters were naturally, and intently, focused on an exit strategy last week as they applied to put spectrum in the incentive auction. Meanwhile, the National Association of Broadcasters was busy looking beyond to the complicated TV station repacking that will follow.

And while wireless carriers and broadcasters are the two key players in auction and post-auction spectrum band plans, the relationship appeared strained even before the Jan. 12 deadline for TV stations to signal their possible participation.

The NAB last week was asking the FCC to lighten up on its current 39-month deadline for TV stations to move to new channels or facilities, while the Competitive Carriers Association, which represents wireless companies eyeing those vacated channels, urged no change.

The FCC is currently giving broadcasters 36 months, plus potentially an extra three, to transition to new channels after the auction has closed, which is likely not until at least the third quarter of this year.

The NAB also was calling for the FCC to “fully compensate” broadcasters for the auction’s involuntary relocation, while CCA was saying the $1.75 billion should be enough.

That back-and-forth came in letters to the FCC, but the NAB is not confining itself to correspondence. It is also backing a bill that would provide an extra $1 billion for the repack moving expenses, though that bill is primarily to ensure that consumers do not lose access to signals in the switch-over, rather than that broadcasters not get paid. Congress set aside that $1.75 billion in incentive auction legislation, and the FCC has concluded it is a cap, not a budget for determining how many stations it can relocate.

In any event, if the outcome of the bill is a cushion in case Congress miscalculated the expenses the first time, both consumers and broadcasters would benefit.

On the Move

NAB funded a study earlier this year suggesting the $1.75 billion would not cover the move, and while the CCA cited earlier NAB support for a 30-month transition, the trade group countered that that was based on 400-500 stations moving, not the potentially 1,000 or more if the FCC meets a high spectrum clearing target. It has band plans figured out for a range from 42 Mhz at the low end to 126 Mhz at the high.

The NAB initially pushed back hard on the auction as something of a forced march toward the tar pits, but as some high-powered members signaled they were interested, the broadcast group has shifted focus to insuring it remains in the interests of both participants and nonparticipants alike.

A win-win for broadcasters would be top dollar for those participating, and a post-auction repack that would preserve coverage areas and interference protections and fully compensate TV stations for their move.

NAB spokesman Dennis Wharton said as much last week in a statement marking the Jan. 12 application deadline.

“NAB expects robust broadcaster participation in the reverse auction, and we hope to see similarly robust participation from wireless bidders in the forward auction,” he said. “While we’ve expressed our concerns, we hope that the rules and systems the FCC has in place will ensure that this voluntary auction goes off without a hitch, and we look forward to the close of a successful auction.”

The courts may have something to do with that. Last week, a group of low-power TV station owners filed their opening brief in a court challenge to their treatment in the auction.

THE ROAD AHEAD

JAN. 12 was the first day in the rest of their business lives for some broadcasters. Even for those that did not decide to at least kick the tires on the FCC’s incentive auction by that deadline day, Jan. 12 also began the process of planning for an eventual move and spectrum repack similar to the 2009 digital switch.

Stations that applied by Jan. 12 don’t have to participate, but only those that did can participate.

The FCC will have to come up with a post-auction repacking plan within six months of the end of the auction that will literally tell broadcasters where to go.

So, for all those auction participants and all the repack participants—which means basically all broadcasters—here is the calendar of mileposts (some of them more like fuzzy guesstimates) between here and TV’s new world:

March 29, 6 p.m. ET: Initial commitment deadline. That is the final deadline to participate and to elect options to: 1) give up spectrum (and get out of the business or share with another station); 2) in the case of a UHF channel, move from a UHF to a VHF; or; 3) in the case of a VHF move from a high to low V.

Mid-to-late April: Initial clearing target and band plan announced. Three to four weeks after the March 29 initial commitment deadline, the FCC will announce how much spectrum it will try to clear and the associated band plan based on how many stations have applied.

Soon after (late April, early May): Reverse auction bidding begins. The FCC predicts this process could take one to two months.

June-July: Forward auction begins. FCC estimates that could last two to four months.

September-October: Forward auction closes. Stations getting new channel assignments—the FCC is trying to minimize those reassignments—have three months to file construction permits and then 36 months to transition to new channels in the repack. FCC announces identity of winning bidders in both reverse and forward auction.

Two years later: FCC confidentiality obligation expires. The commission can then release names of losing bidders in reverse auction.

Some broadcasters were naturally, and intently, focused on an exit strategy last week as they applied to put spectrum in the incentive auction. Meanwhile, the National Association of Broadcasters was busy looking beyond to the complicated TV station repacking that will follow.

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