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Broadcasters to FCC: Taking Time To Get Auction Reimbursement Right is Key

Outline Potential Costs and Issues in Repacking Stations; Table of Allotments is Crucial 9/30/2013 3:18 PM Eastern

 

The FCC heard from broadcasters Monday on the cost and complexity of FCC repacking after the incentive auctions.

Congress gave the FCC $1.75 billion and three years to compensate broadcasters that change channels, switch from UHF to VHF assigments, and make other adjustments.

At a workshop Monday, "TV Broadcast Relocation Fund Reimbursement and Related Issues," broadcasters told FCC officials that they needed to know how stations were going to be realloted before they could calculate all the costs.

FCC officials countered that since the auction is voluntary and they won't know until then just who will be giving up what, and where, they were doing the best they could to plan in the meantime giving that restraint.

Mark Atiken from Sinclair, a panel participant, said that one problem was the three-year deadline. He 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 allows broadcasters to forgo reimbursement expenses in exchange for potentially being able to use some of its spectrum for nonbroadcast purposes, like offloading wireless traffic.

Aitken said it made 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 from the National Association of Broadcasters agreed that that deadline could be problematic. She said it was "crucial" for the FCC to get the table of allotments out ASAP, but even so, "we should be considering whether we need more time.

Broadcasters argued against attempting to save costs through bulk buying or competitive bidding.

The FCC issued a request for further input from broadcasters on what expenses they expected to be covered and potential ways the FCC could save money given that $1.75 billion cap. IT asked in that info request whether it should consider either bulk buying or competitive bidding.

Aitken said that one problem with bulk buying of, say antennas, was that they were very specialized and customized. He also pointed out that with much of the tower work now going to "the other wireless" people--cell companies--the FCC may wind up actually paying a premium rather than getting a discount.

Communications attorney Peter Tannenwald, speaking from the audience, said competitive bidding will not work. He said the company working on a tower should be one with experience on that tower, not the lowest bidder. He said the FCC should guard against price gouging, but "you don't
just want anyone to come along and climb your tower."

David Donovan,  president of the New York State Broadcasters Association as well as a veteran broadcast spectrum policy expert, also made the pitch for the FCC getting the process right rather than by a deadline. He pointed out that it was not just a change to TV, but to an "entire communications system." He said one of the lessons learned from the last DTV transition was that coordination and planning are both essential, and they take time.

Donovan said another issue the FCC needs to think about is translators, which carry TV stations to remote areas. They are not covered by reimbursement costs, but are widely used by stations to reach their markets, not only in the West but in New York, he said. CBS, for example, uses a translator in New York City due to interference issues.

Among the reimbursement costs the FCC is contemplating covering includes new towers, towers fixes, antennas, transmission lines, backup eqiupment, attorneys and engineering fees, and a dozen more pages worth. FCC Media Bureau chief Bill Lake encouraged broadcasters at the workshop to keep their comments coming.

September