March DTV madness

Over 650 stations want waivers; long-term prospects unclear

Stations in many mid-size and smaller markets will not meet the May 1 deadline for launching digital service, and their prospects for getting on the air within the next 12 months are uncertain, several group owners indicated last week.

They were among 650 stations—and counting—that told the FCC they would be missing the DTV on-air deadline of May 1 (that number will probably increase, with the FCC continuing to post waiver applications at press time). The total number of commercial stations that won't make the deadline will also probably be higher because the 160 stations still without construction permits were not required to ask for build-out waivers, though some did.

Almost 45% of commercial-TV operators are seeking permission to delay the build-out of digital facilities, according to waiver applications filed by a March 4 FCC deadline (noncommercial broadcasters have until May 2003). The number is substantially greater than the one-third predicted by an industry-sponsored survey.

Some station operators in less profitable markets are telling the FCC that the uncertain outlook for making money with DTV is impeding construction financing. They include Granite Broadcasting, which bluntly told the FCC it doesn't know when DTV operation will begin at seven of nine stations.

Lack of financing was also Benedek Broadcasting's reason. The company asked for waivers for 26 of 27 stations and told the FCC that 18 of those have no guarantee of beginning DTV service in 2002. The company did not commit to completing construction by May 2003 either, when currently available waivers expire. Instead, Benedek said it will phase in DTV "on a rolling basis … as expeditiously as possible in light of financial and other constraints." Benedek blamed the financial problems on the ad downturn and technical default on its revolving-credit facility.

Compounding similar problems at Duhamel Broadcasting, the company said, its KSGW-TV Sheridan, Wyo., facility and satellites will need a delay because of an engineer shortage. Though not suggesting a postponement of more than a year, it warned that the station's engineering staff has been withered by a death, serious health problems and job exits.

Currently, stations are permitted up to two six-month delays if they can demonstrate problems with equipment, legal fights over zoning or tower siting, inability to obtain financing, and other factors, such as natural disasters.

Big-market stations and even some network O&Os could face continued delays because of zoning fights in such markets as Hartford and Denver. Also, the destruction of the World Trade Center towers has cast doubt on NBC and ABC O&Os and Tribune's WPIX(TV) in New York. "Finding a place for DTV towers in New York City could be a real mess," said Clarke Wadlow, whose firm does legal work for Tribune.

FCC officials said they were not alarmed by the number of requests and quickly granted 114 by late last week. Most of the requests stated that only a few extra months would be needed to complete DTV construction. "If that's the case, I won't be concerned by the sheer volume of requests," said Susan Eid, mass media adviser to FCC Chairman Michael Powell.

The National Association of Broadcasters isn't alarmed either. "The good news is that the requests are primarily from stations in small to medium markets," said NAB spokesman Dennis Wharton, "and most stations think they will be in compliance within six to 12 months."

Paxson, uniquely, already has the right to delay DTV for 19 stations on chs. 52-69. Nevertheless, it needs permission to delay build-outs at 10 stations. Nine other stations are still without digital assignments.

Emmis Broadcasting, with four digital stations already operating, is seeking delays at hub outlets and satellites in 11 markets.

Other major groups seeking delays were Fox, Sinclair, Young, Meredith and Hearst-Argyle, all blaming intractable zoning fights or delays rectifiable in several months.

By the middle of last week, 258 stations were broadcasting in digital, and a few more were expected to be added by the end of the week.