Transition

Once the reverse and forward auctions are complete and the repacking process finalized, the FCC will reauthorize and relicense the facilities of the remaining broadcast television stations that receive new channel assignments in the repacking, or because they have won their auction bid to move to a lower frequency band or to channel share.

Transitioning Broadcasters After the Auctions

Once the reverse and forward auctions are complete and the repacking process finalized, the FCC will reauthorize and relicense the facilities of the remaining broadcast television stations that receive new channel assignments in the repacking, or because they have won their auction bid to move to a lower frequency band or to channel share.

The technical challenges involved in the post-auction station transition process will vary on a station-to-station basis and may be relatively simple for some stations, and more complicated for others. Some stations will be able to retune existing equipment, while others may have to replace their equipment, retrofit their tower structures in order to support new equipment or a change in antenna location, or even move to a new tower. Also, as in the digital television transition, some modifications may need to be coordinated with other stations (such as in cases where multiple stations share a tower and/or other facilities). In the Notice, the FCC seeks comment on procedures to reduce the technical challenges and make the transition process as smooth and efficient as possible.

The FCC also seeks to reduce regulatory challenges for relocating stations. In the interest of facilitating a more streamlined transition process, the Notice proposes the adoption of new, auction-specific, broadcast license modification procedures and seeks comment on how the FCC should structure those procedures. The Notice also solicits comment on reasonable deadlines for winning reverse auction bidders that opt to cease broadcasting and for transitioning stations, including winning auction bidders who will remain on the air to relocate to a new channel.

Reimbursement of Relocation Costs

The Spectrum Act requires that the FCC “reimburse costs reasonably incurred by” broadcast television licensees that are reassigned to new channels, as well as by multichannel video programming distributors (“MVPDs”) that incur costs in order to carry the signals of reassigned licensees.

The Spectrum Act provides $1.75 billion to be expended for reimbursements. It also mandates that the FCC make all reimbursement payments within three years of the completion of the auctions. Therefore, the FCC places great importance on conducting a fast and efficient reimbursement process. Of the broadcast stations that may be reassigned in the auction and repacking processes, only full power and Class A licensees that are involuntarily assigned to new channels in the repacking process would be eligible for reimbursement. Winning auction bidders that remain on the air and incur relocation costs because of their chosen bid option (i.e. stations that move from UHF to VHF or “sharee” stations that move in order to share a channel with another licensee) will be expected to cover their own relocation costs.

The Notice proposes to allow the FCC to reimburse broadcasters based on either their estimated costs of relocating to a new channel, which would allow for advance payment, or their actual out-of-pocket cost of relocation. It then seeks comment on how to determine eligible reimbursement costs, as well as on reimbursement methodologies. Additionally, the Notice solicits comment on the Spectrum Act provision allowing a station that meets certain requirements to accept a waiver of the Commission’s service rules in lieu of reimbursement.

The Notice also seeks comment on the best approaches to reimbursing MVPDs for the costs they incur to continue to carry the signals of reassigned broadcast licensees. In particular, the Notice seeks comment on what costs should be reimbursable, whether to allow MVPDs to elect to be reimbursed by an advance payment based on estimated costs or only based on actual costs, and how to administer the reimbursement process.

Finally, the FCC recognizes the importance of managing the reimbursement process and funds in a careful and responsible manner. Therefore, the Notice seeks comment on how to best protect against waste, fraud, and abuse in order to preserve and protect these funds.