FCC Will Pay for Covered Pre-Auction Expenses - Broadcasting & Cable

FCC Will Pay for Covered Pre-Auction Expenses

Says that will help broadcasters get jump on repack process
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The FCC has ruled that TV station and MVPD repacking expenses incurred before or during the upcoming broadcast incentive auction--tower mapping, for example, or structural analysis--will still be covered by the FCC so long as 1) they are coverer repacking-related expenses and 2) the station ultimately has to move to a new channel in the repack.

"We interpret the statute to cover pre-auction expenses that otherwise are eligible for reimbursement," the FCC said in a declaratory ruling in response to requests for clarification. "By allowing broadcasters to get a jump start on the relocation process, this ruling will promote a rapid, non-disruptive transition following the broadcast television spectrum incentive auction."

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The auction is expected to start next month, though when it will end is up to the marketplace--and perhaps the courts.

The FCC did not say in its incentive auction report and order whether pre-auction expenses were covered.

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Various parties asked for clarification, including the American Tower Corp., which wanted to know if it started work before the 39-month repack window, whether that would be covered by the $1.75 billion fund the FCC has available to reimburse stations for moving and MVPDs for any expenses incurred in carrying the new stations--like re-tuning headends.

The answer is yes, so long as the work proves necessary to the repack and the FCC concludes it is a covered expense.

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The FCC reminded auction participants that there is no guarantee that any expense will be covered, though the FCC has provided guidance on what types of expense it expects to have to cover.

But the FCC said that if a station pays for repack planning and its bid to go off the air is not accepted or it is not repacked, the FCC won't pay for it. "[T]hat expense would be incurred at the station’s own risk," it said.

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