The FCC released its broadcast spectrum incentive auction order 6/2. It’s looking to be a pretty complicated process—including the whole reverse auction roadmap—and has LPTVs in an uproar. Some 1,700 LPTV licensees with more than 10,000 built stations and CPs will be facing an unfunded mandate of over $1 billion in channel relocation costs. Some good news, though, as the Commission is promoting channel sharing and allowing a change to the city of licenses in sharing deals. RBR-TVBR asked Larry Patrick, Managing Partner, Patrick Communications; and Francisco Montero, Managing Partner, Fletcher, Heald & Hildreth, P.L.C., for their thoughts:
Said Patrick: “Seeing the road map for the spectrum auction is very helpful both for those who wish to surrender their licenses and those who want to remain broadcasters. There still remains misunderstanding of the auction and repacking based on our conversations just recently with station owners in several markets. The FCC’s outreach efforts will be critical to the auction and repacking processes. Promoting channel sharing, while allowing a change to the city of licenses, may now open up some opportunities for current licensees. The test in Los Angeles is with stations that share a common transmission site. The test for sharing may be when stations currently operate from diverse transmission sites and with situations where the sharing is between a Class A and a full-power station.
Chairman Wheeler is a man of action who intends to launch the auction next year. His largest challenge may be to convince enough television broadcasters to surrender their licenses so that the broadband bidders will generate the target revenues for the Commission and those who will surrender licenses. We are now just starting an interesting ride in the history of television broadcasters.”
Said Montero: “The new rules won’t take effect until 60 days after they get published in the Federal Register — and even then, the “information collection” components of the rules will have to await OMB review thanks to the “Paperwork Reduction Act.” Still, the release of this Report & Order sets in real motion a process which began with the release of the National Broadband Plan back in early 2010. The Broadband Plan contained a controversial proposal to reallocate spectrum from broadcast television, mobile satellite, government and other uses to “mobile broadband” through the use of innovative “incentive auctions” and other market-oriented mechanisms. Now, four years later, we have the culmination of that initial innovative proposal. As the FCC has stated, the rules adopted today establish the foundation for the incentive auction and the format for developing detailed, final auction procedures in the pre-auction process. There are four parts to the rules: (1) The reorganized 600 MHz Band, including repacking and unlicensed operations; (2) The Incentive Auction process and design; (3) The post-auction transition for all incumbents in the 600 MHz band; and (4) the post-transition regulatory issues, including channel sharing. There continue to be very controversial elements to this process. Clearly the LPTV stations, which cannot participate in the auctions due to their secondary status as license holders, are not satisfied with what they see as over $1 billion in unfunded mandate costs for channel relocations, and the NAB has expressed its concern with the formulation of the spectrum repacking process. Specifically, under the Spectrum Act adopted by Congress which put the reverse auction process in motion, the FCC must make “all reasonable efforts” in the repacking of spectrum to protect both the population served and coverage area of broadcast stations. However, the NAB and others charge that TV stations that are not even participating in the auction will see their coverage areas diminished in repacking and that the software that the FCC has established for these purposes is untested and flawed. So the battle will continue. But the release of the Report & Order is clearly a landmark event in the process initiated in 2010 by the National Broadband Plan.”