An unreasonably short deadline
Many broadcasters criticized the proposed 18-month deadline for construction of new broadcast facilities as unreasonably short. Harris Broadcast argued that the engineering infrastructure could not handle the expedited 18-month timeline and suggested a phased, geographic-based transition that would account for unforeseen circumstances like bad weather and tower damage. Other commenters stated that the DTV transition and BAS relocation demonstrated that three years is the bare minimum needed to complete construction and transition to new channel assignments.
Wireless commenters supported the FCC’s position that three years is too long for the transition to repacked facilities. U.S. Cellular supported the 18-month deadline, while Sprint argued that the final 25 percent of a broadcaster’s relocation payment should be conditioned upon relocating within six months of a timeline adopted by the Commission.
In the previous article, I reminded readers that a maximum of 434 stations could undergo antenna changes within a three-year period, with the limitation being the number of qualified tower crews.
NAB, supported by other broadcasters, argued that the $1.75 billion allocated by Congress for the relocation fund should be enough to cover the reasonable relocation costs of between 400 to 500 stations. NAB’s comments stressed that the FCC should consider $1.75 billion as a cap on its repacking model.
NAB also advocated for broadly defining what would constitute eligible broadcaster costs, while Harris Broadcast stated that the FCC should adopt and release a detailed list of covered expenses prior to the auction. One major broadcast owner also noted that the FCC should anticipate higher costs than during the DTV transition because of the short time frame.
NAB rejected both NPRM proposals for repacking relocation payments and instead proposed a two-stage approach. In Stage 1, eligible entities would file a request for advanced payment based on a schedule of values, and all entities would receive the same percentage of estimated expenses that would be no higher than 80 percent of those estimates.
In Stage 2, 30 months after competition of the forward auction, eligible entities would file documentation of their actual expenses. The FCC would then determine the “true up” amount or be paid back unused funds from the advance payment.
In addition, stations facing delays beyond 30 months would file additional documentation of expenses yet to be incurred. To reduce abuse to the relocation fund process, NAB proposed appointing a third-party administrator to the fund that would conduct spot audits of stations’ documentation.
Will broadcasters volunteer?
A frequently asked question is: Will broadcasters actually volunteer to participate in the reverse auction? Recent news articles indicate that more than $345 million has been spent by several speculators to acquire television properties for the purpose of selling them in the reverse auction.
One well-known former broadcaster, Preston Padden, is the Executive Director of Expanding Opportunities for Broadcasters Coalition. This is a group of more than 70 stations interested in participating in the reverse auction process. Padden indicates that of those stations involved, there is about an even split between full-power and Class A station groups.