Earlier this week, we wrote about the Court of Appeals decision denying appeals of the FCC’s 2014 order setting the framework for the incentive auction to reclaim spectrum used by TV stations and repurpose it for use by wireless companies to provide more high-speed wireless broadband opportunities. But, in addition to the appeals, there were also a number of petitions for reconsideration of the 2014 order. Those were also resolved in an FCC order released last month. Many of the issues considered concerned technical matters as to how the new wireless spectrum would be allocated and sold after it is acquired from the broadcasters. But the order also resolved a number of issues of specific importance to broadcasters, some of which could potentially result in another appeal of the 2014 order to the Court of Appeals.
Initially, in its reconsideration order, the FCC refused to reconsider the modifications to the OET-69 standard for determining interference between television stations as that issue was before the Court of Appeals in the appeal filed by Sinclair and the NAB – the appeal that was denied by the FCC the week before this order was released. The use of the TVStudy updates to the inputs to the OET-69 have again been in the news this week, as the FCC released new population counts for each auction-eligible station as computed by using this information, and asked for comment on this information by July 30. The population served by a TV station is a very important input into how much a station would receive to surrender its spectrum in the incentive auction (just how important that input will be is an issue to be addressed at the FCC meeting next week). The FCC request for comments is here, and the table showing the FCC’s prediction of the population served by each auction-eligible TV station is here. This updated information has already proved to be controversial, with one association representing probable auction participants suggesting that the recomputation of a NY TV station that will set the highest opening offer to buy out the spectrum of any TV station, and from which the offers to other lesser valued stations will be derived, could have the impact of lessening initial buyout offers to other broadcasters (see the blog post here).
But that is not the only controversy over the FCC’s recent decisions. The one group that has been making the most noise about a trip back to the Court of Appeals is the LPTV community. In the legislation authorizing the incentive auction, LPTV stations were not specifically included in the stations that would be “protected” in the auction – stations that would either be able to sell out in the incentive auction or which would be guaranteed a place in the repacked TV band. Only full-power and Class A stations were so protected. In the FCC’s 2014 order, the FCC refused to extend any such coverage to LPTVs, a decision affirmed in the reconsideration order. The FCC concluded that LPTV stations are secondary stations, not protected against interference from primary stations. As LPTV operators always knew that their stations could be bumped off the air, the FCC concluded that there was no statutory reason include them in the upcoming incentive auction or protect them in the subsequent repacking, and as using the FCC’s discretion to voluntarily include them would make the auction more difficult to complete successfully, the Commission concluded that there was no policy reason to reconsider its 2014 decision. While the FCC has promised to address LPTV interests and how they would be treated after the auction in a separate proceeding (see our summary of the proposals made in that proceeding here) some LPTV advocacy groups have threatened to challenge the decision in the courts or in Congress, though the threat does not, as yet, seemed to have deterred the FCC from pushing forward with its plans for a 2016 auction.
Class A stations, however, got the benefit of one of the few changes to the 2014 order to which the FCC agreed. The FCC recomputed and extended the protections afforded to these stations in the auction and subsequent repacking of the television spectrum, finding that the methodology that it used previously to compute the coverage of these stations had understated that coverage.
The FCC also addressed the protections to be afforded to other classes of stations in the incentive auction and repacking, protecting the facilities of certain television stations that had been operating from the World Trade Center in 2001 but were operating with temporary facilities on the 2012 date used for the snapshot of station facilities that would be protected, and also protecting Class A stations that were operating out of the core of the television band on that 2012 date but had construction permits to move back into the core, and which are now operating in the core TV band. The FCC elected not to protect other non-core Class A eligible stations, and it also rejected requests to protect the proposed UHF facilities of full-power stations that had VHF facilities in 2012 but had requests pending to move to a UHF channel.
There were other significant issues raised by broadcast groups where the FCC refused to grant reconsideration. PBS and other public television organizations had urged the FCC to protect at least one TV channel in each market for noncommercial use. The Commission refused to do so – concluding that if public stations wanted to sell their spectrum, they should be free to do so, as freeing up more spectrum is in the best interests of the success of the auction. The FCC suggested that public stations that were considering selling their spectrum should consider channel sharing arrangements so that they could continue to serve their community after the auction but still enjoy some of the financial benefits of selling their channels. But even if local stations don’t stay in business, the FCC promised to consider other options to protect public broadcasting service, including waiving the freeze on new TV applications to allow adjacent-market public stations to expand coverage into markets where all of the public stations had sold out in the auction, or allowing LPTV service to be quickly initiated post-auction to substitute for a disappearing service. But these would be post-auction remedies.
Arguments were also raised by the NAB and other broadcasters that the auction should not be conducted until international coordination could be completed with Canada and Mexico, so that the protections that had to be afforded to stations and allocations in those countries could be addressed before the auction and repacking decisions had to be made. The FCC refused, seemingly believing that it would either be able to reach agreements with these countries before the auction, or that the Commission could address new TV allotments after the repacking on a case-by-case basis using the normal international coordination process. The FCC promised to work with stations that could not accomplish coordination with a neighboring country in time to complete their post-repacking buildout of their new facilities in the allotted 39 months. How that would work is unclear.
The FCC also mentioned channel sharing and unlicensed spectrum, which we will address in separate articles as these matters were also considered in more depth in separate FCC orders released last month. This plethora of FCC actions gives broadcasters many issues to consider in this run-up to the incentive auction. On Tuesday, August 4, my partner Jonathan Cohen and I will be doing a webinar for the Michigan Association of Broadcasters, which will also be made available by a number of other state broadcast associations, on the incentive auction issues facing broadcasters. For more information about that webinar, you can see the announcement here, or you should contact your local state broadcast association.