As the Federal Communications Commission moves forward on the post-auction repacking process for broadcast stations, broadcasters are concerned about a shortage of two key things: money and time. While Congress seems willing to give more of the former, it is torn on the latter.
The House Subcommittee on Communications and Technology held a hearing Sept. 7 to investigate the challenges facing the repacking process, during which the FCC must reorganize broadcasters into remaining TV bands following the 600 MHz spectrum incentive auction earlier this year.
During the hearing, there was widespread agreement between broadcasters and wireless industry representatives that Congress will likely need to allocate more funds to reimburse TV station owners and pay TV providers impacted by the move.
Patrick Butler, CEO of America's Public Television Stations, noted that prior to the auction, the House Subcommittee on Communications and Technology initially allocated $3 billion for the post-auction transition fund, but that figure met with opposition in the Senate, which wanted to allocate only $1 billion. The compromise figure was ultimately $1.75 billion.
"As we now know, and as both public and commercial broadcasters predicted at the time, that's still not enough," Butler said, pointing to the FCC's recent reimbursement estimates, which totaled $2.12 billion. For the 149 public television stations being repacked, Butler said the funding deficiency is more than $50 million.
Scott Bergmann, vice president of regulatory affairs for the CTIA wireless association, agreed the $1.75 billion figure is likely to be insufficient. "I want to emphasize that the wireless industry supports a fully-funded repack that ensures broadcasters are made whole for reasonable costs associated with acquiring comparable facilities in the post-auction transition," he said.
Members of both the House and Senate introduced bills to address the expected funding shortfall, with Rep. Frank Pallone Jr., D-N.J., proposing a $1 billion emergency fund that could be authorized if needed for TV station relocation costs, and Sen. Jerry Moran, R-Kan., proposing a fund of an unspecified amount. Both the House and Senate bills have been referred to committees for review.
Based on the comments from the hearing, Rick Kaplan, executive vice president and general counsel for the National Association of Broadcasters, said "It seems like everyone's in agreement" on the need for Congress to provide "the money to ensure broadcasters are made whole."
Broadcasters, wireless representatives and even members of Congress remain divided on the 39-month timeline that has been set up for the repack process.
CTIA's Bergmann said sticking to the current timeline is absolutely critical for building out next-generation wireless services and ensuring the success of future auctions. He noted that 50 bidders in the auction spent nearly $20 billion to purchase spectrum based on the expectation of a 39-month transition period.
"Allowing the 39-month repacking period to slip would fundamentally change these investment-backed expectations," he said, adding that if the government demonstrates a willingness to retroactively change the rules of this auction, bidders in future auctions may adjust for that risk by bidding less.
"Lower bids, in turn, could lead to failed auctions," Bergmann said.
But Kaplan from the NAB said broadcasters are not looking to push back the 39-month timeline broadly. Instead, he said the broadcast industry wants a "safety valve" for stations unable to meet the deadline due to circumstances beyond their control.
"Congress should ensure that no station is forced to go off the air or reduce service due to circumstances outside its control," he said.
Some members of Congress, including Rep. Anna Eshoo, D-Calif., expressed skepticism about extending or softening the timeline, with Eshoo noting, "I think the 39 months is a long period of time."
But broadcasters at the hearing explained the repack is occurring over 10 phases, meaning no single station has the full 39 months.
Lyn Plantinga, vice president and general manager of E.W. Scripps Co.'s NewsChannel 5 Network in Nashville, Tenn., said her station will have only six weeks — from Sept. 7, 2019, to Oct. 18, 2019 — to coordinate with two additional local broadcasters and move from channel 25 to channel 36.
"Even moderate rain can prevent a tower crew from climbing, especially on a tower as tall as ours at 1,400-plus feet. Several days of rain – or more severe weather – can close the window to complete the project," she said.
Based on previous channel moves, she compared the process to "changing the tires on your car while you're still rolling down the highway." In other words, though she hopes the repack process will go perfectly, she can foresee difficulties ahead.
