C-Band Earth Station Lump Sum Seen Falling From Some MVPDs' Favor
The clock started ticking Thursday for incumbent C-band fixed satellite service earth station operators to decide whether to take the lump sum for spectrum clearing transition costs. Some expect relatively few to take that option after the agency made only some cost estimate changes sought by many MVPDs (see 2007060051). The Wireless Bureau public notice set Aug. 31 for the lump sum election and laid out the cost category schedule and dollar amounts. The FCC seems unlikely to budge on the deadline or inclined to hand out waivers, said broadcast lawyer Anne Crump of Fletcher Heald.
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Cable operators replacing their earth stations with fiber is now "a non-option" due to the "meager" payment route, ACA Connects said. The bureau could have spent more time working on the lump sum calculation item without compromising the C-band auction or accelerated transition schedule, it said. "However, in its own rush to get things done, the Bureau has wholly discarded the directions of the Commission, and in turn small cable operators -- who never asked for this transition, have nothing to gain from it, and only ask to be made whole -- are denied the promises the Commission made to them in the C-band Order."
“This could be the turning point” spurring some small cable operators to get out of video altogether, said WinDBreak Cable CEO Bill Bauer. He said the lump sum route is too big a risk due without a guarantee what earth station operators say they need will be funded. However, there are signs letting satellite operators handle the transition also could be problematic, with them apparently not providing earth stations replacement receivers, he said. "The cable operator is going to be left holding the bag and it's going to be empty," he said. While there's likely frustration at many small cablers at the regime, it's questionable whether there are the resources for a legal challenge, Bauer said.
SES emailed it's "pleased that the final cost catalog has been published and we appreciate all of the work the FCC did to develop it. The decision to elect the lump sum remains with each incumbent earth station operator, and to the extent such election are made, we will coordinate with those operators as required in the Report and Order. Otherwise we are committed to transitioning SES’s services and associated incumbent earth stations smoothly and on time for the Phase I and Phase II deadlines.” Intelsat didn't comment.
"I’ve got to imagine a lot of folks are re-thinking their decisions," emailed MCTV President Katherine Gessner.
Unaddressed are antennas not officially considered incumbents that earth station operators have been trying to get registered even as registration remains frozen (see 2007230001). The FCC seems to have decided how to handle them by not doing anything, said Fletcher Heald's Crump. She said seeking a court stay on the issue seems unlikely because of the expenses involved.
The bureau said its lump sum cost estimates are what are expected to be typical costs -- atypical expenses like antenna replacement aren't counted. In more-complex transitions that the average estimated costs won't cover, earth station operators can seek reimbursement for actual outlays through the relocation payment clearinghouse, it said. Staff said they increased the sum to include some typical cost items, like application modification fees, buying and installing new feed horns on some dishes, and expenses for system integration of modified earth stations.
The bureau opted to not include integrated receiver/decoders replacement costs in the earth station lump sum, saying they are part of the satellite operators transition process and thus to be covered by satellite transponder costs. The PN said satellite operators and programmers will select, buy and deliver the needed compression equipment to the earth stations, though the installation work is best left in the hands of the earth station operators and that part is in the MVPD lump payment.