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In the industry’s latest example of a Catch-22, broadcasters say they need more information before they can tell the Federal Communications Commission how much their auction repacking will cost. The FCC, however, says it won’t have some of that information until it knows which broadcasters will be giving up spectrum. All of which means the chances are slim that broadcasters will get a blank check made out to “Commission Auction— Station Houses” anytime soon.
Why This Matters
When the FCC last week polled broadcasters and equipment manufacturers on what expenses it should expect to cover in the post-incentive auction repacking world, they got an earful.
The FCC held a two-panel workshop on Sept. 30, just before it had to close up shop and cancel other events due to the government shutdown. The takeaway from the workshop was there will be a lot of expenses to cover, but no way to know how much it will cost until the FCC lets broadcasters know who will be moving, and where.
Since the auction is voluntary, the FCC won’t know that information beforehand and will have to plan as best as it can, given that built-in restraint.
Another constraint is the $1.75 billion congressional cap on reimbursement expenses.
Among the issues related to moving and reimbursement raised at the workshop were:
New tower ice and wind load standards that will affect changes to existing towers—akin to modifications on older homes that can trigger new building code requirements.
Zoning and permitting issues: Broadcasters argued that the FCC needs to preempt state and local zoning and permitting requirements to speed the process.
Interim facilities while broadcasters are moving channel positions: Some stations will need them to prevent going dark during the transition.
Translators: The FCC isn’t paying for them in the repacking. But many stations use them to reach remote areas, particularly out west. David Donovan of the New York State Broadcasters Association, a veteran spectrum policy expert, said New York has translator issues.
Three and Out?
Mark Aitken from Sinclair Broadcast Group, a panel participant, said that a big problem with the repacking expenses is the three-year window for FCC reimbursements. Aitken called it an artificial restraint that would yield suboptimal results, when the FCC goal should be to help broadcasters improve their service. That would include allowing broadcasters to test nonbroadcast uses of some of their spectrum.
Sinclair has sought waivers for all 162 stations under a part of the auction legislation that permits broadcasters to forego reimbursement expenses in exchange for potentially being able to use some spectrum for nonbroadcast purposes, such as offloading wireless traffic.
Aitken said it makes no sense tying broadcasters to 20-year-old technology and that if Congress had “known what it didn’t know,” it would have written the law differently. He called on the FCC to ask Congress to rewrite the law to provide more than three years, an obviously tall order in a Congress now embroiled in budget and debt issues.
Jane Mago, executive VP and general counsel for the National Association of Broadcasters, agreed that the deadline could be problematic. She said it is “crucial” for the FCC to get the table of allotments out ASAP.
The FCC has been talking up the possibility of bulk buying or competitive bidding. But broadcasters suggested that equipment is customized and specific to individual station needs, which makes bulk deals problematic. And as for competitive bidding, one audience member, a communications attorney, said broadcasters will want someone on their tower who has been on it before. “You don’t want price-gouging,” he said. “But you don’t want just anyone to come along and climb your tower.”