NAB Takes Issue With UHF (to VHF) Discount - Broadcasting & Cable

NAB Takes Issue With UHF (to VHF) Discount

Says incentive auction payout should not play favorites
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The National Association of Broadcasters has told the FCC that it should pay stations that agree to give up their UHF channel and move to a VHF channel in the post incentive auction repacking the same as they would a station that gave up its UHF channel and got out of the business or gave it up and shared spectrum with another station.

In reply comments at the FCC, NAB associated itself with the comments of the Broadcasters for VHF Pricing Parity (BVPP) (the auction has spawned a number of new coalitions, including EOBC and BFAP, looking to maximize their potential payout). NAB says that the commission should be "wholly agnostic" as to whether a broadcaster gets out or just moves to the VHF band, since in both cases the FCC gets the UHF channel for the incentive auction — all the spectrum being auctioned is in the UHF band."

"After all, the Commission is not proposing to discount bids submitted pursuant to channel sharing arrangements — why should it treat moves to the VHF band any differently?," said NAB. "Elimination of the discounts will encourage broadcasters interested in remaining on the air but willing to move to the VHF band to participate in the auction."

As the FCC has proposed it, those stations that agree to move from a U to a V will not get as much money, some 20% to 33% less for moving to a low V, but as much as half to two-thirds less for moving to a high V, than those who get out of the business or who agree to share channels.

So a station that would get $100 million to give up all its spectrum would only get $67 million-$80 million for moving to a low VHF channel, and only $33 million-$50 million for moving to a high VHF channel.

There is also a discounted payment for agreeing to move from a high V to a low, but NAB has not taken a position on those discounts.

NAB's other asks are for the FCC to scrap its variable band plan, scrap its dynamic reserve pricing (DRP) model that NAB argues undervalues stations out of the gate, and asks it to provide broadcasters more information.

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