Relocation Fund Should Cover ‘Soft’ Costs, Stations Not Repacked, Say Broadcasters
The FCC should reimburse broadcasters for marketing expenses, learning to use new equipment and other “soft” costs they will incur in the post-incentive auction repacking process, as well as the costs involving physical infrastructure. So said several associations and broadcasters commented on the “Catalog of Eligible Expenses,” the commission’s proposed list of costs broadcasters and others are most likely to incur as a result of broadcast channel reassignments. The proposed catalog “focuses too heavily on certain capital assets to the relative exclusion of significant ’soft’ costs associated with repacking,” said NAB. Costs from renegotiating leases, local zoning fees and staff overtime related to the repacking should all be reimbursable, said commenters. “All costs required for a station to continue providing its current level of service to the public that would not have arisen but for the repacking process should qualify for full reimbursement,” said Hubbard Broadcasting.
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The repacking process for each station is so unpredictable that the FCC should ensure that the possibilities for reimbursement don’t end with the catalog, said NAB and a joint filing from PBS, Corp. for Public Broadcasting and the Association of Public Television Stations. The FCC should not limit reimbursement to costs listed in the catalog, because many costs of the repacking will be unforeseeable, said several other commenters. The FCC “must recognize that every station’s needs, costs, and circumstances in the repacking will be different -- there is no normalized bell curve of standard transmission facilities,” said NAB. The commission should consider setting up an advisory board of broadcasters to consider requests for reimbursement filed after the repacking that weren’t included in the catalog, said the public TV joint filing. NAB said the FCC should hire an “independent, third-party administrator” to run the reimbursement program and require broadcasters to certify their costs as “reasonably necessary to reach the audience in their contour,” with FCC forfeitures as penalties for abuse.
"The FCC also should consider the costs incurred by broadcasters that are not subject to repacking but that are affected by those who are repacked,” said American Tower, echoing comments by NAB, HBC Solutions and several others. Stations that aren’t being repacked could be affected by interference from newly relocated stations, said the commenters. Multichannel video programming distributors will also incur expenses in the repacking and should be compensated, said filings from NCTA, DirecTV and Dish Network. Cable providers may need new antennas or additional fiber to pick up relocated stations, and DBS engineers will have to travel “extensively” to make adjustments at receive facilities, said the filings. Manufacturers of wireless mics that will be bumped from their band by the repacking also filed comments asking to be compensated from the relocation fund.
Every broadcasting commenter rejected FCC proposals to require those seeking reimbursement to use a competitive bidding process, bulk purchasing or to repurpose equipment from other facilities. “Even if a slightly lower price could be had by seeking competitive bids for the equipment, the resulting burden of retraining employees and adapting to new equipment and servicers could be cost-prohibitive,” said National Religious Broadcasters. “Equipment sharing is appropriately left to the marketplace,” said NAB.
Several commenters urged the FCC to base reimbursement on broadcasters’ actual costs rather than issuing advance payments based on estimates. “An estimate-cost reimbursement method is problematic because the amounts designated as reasonable compensation may ultimately bear no rational relationship to the actual costs faced by broadcasters,” said LeSEA Broadcasting. NRB proposed a “hybrid method” wherein broadcasters are issued some advance money based on an estimated cost, but their actual costs are assessed after the repacking in a “true-up” that could involve additional payment or the return of unused funds.
The problems that will be caused by the repacking can be minimized by giving broadcasters the maximum amount of time to prepare, said many commenters. “The Commission can materially assist broadcasters by declaring the forward auction closed at the latest possible date, and by providing the earliest possible notice of channel reassignments,” said NAB. Releasing channel reassignments earlier could also help with problems of equipment supply and labor the repacking is expected to cause (CD Oct 1 p4), said antenna manufacturer HBC Solutions. “With advance notice of the transition schedule and the equipment needs of their customers, manufacturers could place bulk orders with their suppliers to secure the best pricing and manage their production schedules to maximize efficiency,” said HBC.
Though virtually all broadcaster comments called for the expansion of what would be reimbursed, NAB and several others said the $1.75 billion TV Broadcaster Relocation Fund should be treated as a “budget” for the repacking effort, limiting the number of stations that can participate so that repacking costs don’t exceed the fund. “While this approach may mean that less spectrum is repurposed for mobile broadband purposes, it ensures that the FCC can carry out its mandate of preserving broadcast service for the public,” said NRB. “Congress created the Relocation Fund as a means to make whole those non-volunteering broadcasters subject to repacking,” said NAB. “That statutory mandate can be fulfilled only if the Commission recognizes that the Fund must constrain the number of television stations that can be repacked.” -- Monty Tayloe (mtayloe@warren-news.com)