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NAB to FCC: Don't Blow Through Relocation Fund - Broadcasting & Cable

NAB to FCC: Don't Blow Through Relocation Fund

Says a too variable band plan is recipe for running out of money
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The National Association of Broadcasters in the past two weeks has hammered the FCC over its variable band plan for the broadcast incentive auction, which could put TV stations and wireless operations on the same or adjoining spectrum in adjacent markets during the repacking of stations after the incentive auction, a move NAB says would hurt broadcasters and blow through Congress' budget for paying broadcasters' post-auction moving expenses.

The FCC wants to allow up to a 20% variation in the amount of spectrum cleared in each market— NAB wants more like 3%. The more variation, the more likelihood that TV stations and wireless operators will be using the same spectrum, which will "impair" some spectrum due to the interference potential, meaning it will be less valuable to wireless carriers in the forward auction.

NAB has dubbed that a "more 'kind-of-almost-nearly-near-nationwide'" than "near-nationwide" band plan.

In several meetings with FCC chairman Tom Wheeler's legal advisor, Renee Gregory, and staffers for other commissioners, NAB execs said that putting even a few stations in the wireless portion of the band could "dramatically affect the amount of spectrum available in the forward auction because that co-location could create significant impairments to its usability."

"[I]t is entirely possible that, if the FCC places even a handful of stations in the wireless band, it may consequently be restricting the forward auction to two or three blocks of paired spectrum available in the Northeast corridor."

NAB also argues that the FCC is low-balling its estimates of the financial impact of repacking on stations. The FCC has a $1.75 billion relocation fund for repacking TV stations (and some cable operator expenses for re-tuning headends) after the auction, but NAB says the FCC approach puts minimizing costs to broadcasters in the "back seat" of the process, only accounting for those costs after the auction is over, when it would be tough to reduce the number of stations to be repacked if the $1.75 billion doesn't cover the costs.

"We continue to urge the Commission to consider the fact that, by taking an approach that makes broadcaster costs an afterthought, it will be blowing through Congress's $1.75 billion budget and harming broadcasters in the process."

NAB says the FCC has yet to demonstrate why optimizing repacking earlier in the process will prevent it from repurposing spectrum.

The FCC needs to get its framework finalized soon so it can start lining up bidders on both sides of the auction for a planned early 2016 incentive auction now less than a year away.

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