Broadcasters Still in Search of Spectrum Answers

NAB says not enough meat on repacking bone in first FCC workshop

Only a handful of broadcasters showed up Oct. 26 for the FCC’s first official workshop on the framework for reverse incentive auctions. The ones that didn’t apparently didn’t miss much. According to the National Association of Broadcasters, which had “a bunch” of folks monitoring the proceedings online, not a great deal of new information on repacking of stations seemed to come up.

The FCC workshop offered few definitive answers— which is pretty much the only thing broadcasters are looking for as they decide whether to put their most valued commodity up for auction. But one information point made it clear that, generally, only larger-market broadcasters will be able to cash in on the FCC’s onetime payout for either getting out of the business or agreeing to share channels.

According to Media Bureau chief Bill Lake, the FCC is mostly looking for spectrum from broadcasters in the top 25 or 35 markets, plus another few elsewhere, which means that small market stations who may be the ones in  nancial trouble won’t have the option of the cash infusion the FCC has been promoting.

Gary Epstein, FCC senior adviser and co-lead of the commission’s Incentive Auction Task Force, said that the FCC is committed to voluntary incentive auctions that will, 1) honor Congress’ statutory language, 2) work to include the industry in a transparent repacking process, and 3) provide a viable reimbursement and transition mechanism.

Epstein told broadcasters in a speech three weeks ago that the FCC was expecting to be able to cover all the broadcaster and cable operator moving expenses related to the auction with the $1.75 billion Congress set aside for those expenses.

“Our No.1 goal is to ensure that broadcasters have the information they need and that the FCC runs a transparent and open process,” NAB spokesman Dennis Wharton said last week. “When it comes to the involuntary part of the auction—the forced relocation of broadcasters into“a smaller TV band—we have yet to see much meat on the bones. We look forward to working with the FCC to gain greater understanding of the FCC’s plan in order to meet Chairman Genachowski’s stated goal of preserving and enhancing a robust broadcasting industry.”

Unfortunately, broadcasters had an almost immediate opportunity to demonstrate that value last week as many East Coast stations dropped regular programming to go wall-to-wall with coverage of Hurricane Sandy. The NAB has been consistently citing that first informer” mantle as a defense against the momentum for spectrum reclamation, and Sandy offered, sadly, a ready-made example.

“I salute the remarkable work of our radio and TV station colleagues now putting themselves in harm’s way to keep millions of people safe and informed on the devastation of this deadly storm,” said NAB President Gordon Smith last week.

While the FCC’s workshop was pitched as an update for broadcasters, according to one workshop attendee, a show of hands at the event revealed only three others in the room—though it was also webcast, so remote broadcaster participation could have been larger, as apparently it was for NAB members.

At the event, FCC staffers talked mostly about proposals that had already been put out for comment, with the  nal look of both auctions and repacking far from set. Lake made the point that this was very much the beginning of the process.

Among the proposals/questions covered in the workshop:

Anti-collusion measures:
The auction will have anti-collusion rules to make sure bidders can’t get together to inœ ate prices, but the FCC recognizes that if stations are being given the opportunity to share channels as an incentive for one to sell, with those expected to be private negotiations, those broadcasters will have to be talking and sharing information.

New channels under repacking:
Unlike during the DTV transition, stations that are moved to new channels to free up blocks of spectrum for wireless will not get to choose those channel numbers. But Lake pointed out the FCC is considering allowing stations unhappy with their new channels to apply to the FCC to change them.

Lake said the repacking transition process presents challenging timing issues. Along with asking whether there should be a hard date or a phased transition, the FCC is planning for an 18-month transition, pointing out that some TV stations in the 2009 DTV transition made the switch in 12 months.

Money: The FCC has $1.75 billion to cover any broadcaster and MVPD moving expenses. The FCC has proposed various compensation plans, including upfront payments based on market size, a partial payment and “true up” after the real costs are incurred or waiting until the expenses are  led and reviewing them.

In all these plans and suggestions, the FCC is looking to make the auctions as easy for and attractive to broadcasters as possible. Epstein has said that most of the complexity will be “under the hood,” and the province of FCC staffers rather than broadcasters.

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Spectrum of Possibilities

Two FCC incentive auction leaders take on all sides of the issue, from station rights to interference (electrical and otherwise)