In a public notice issued Monday, the FCC announced that it would release $1 billion in funding as an initial allocation to cover the repacking expenses of full power Class A television broadcasters and multichannel video program distributors (MVPDs) who must move to new channels or modify their facilities as a result of the FCC’s first-ever broadcast incentive auction. At the same time, fifty-six House members from both sides of the political aisle urged FCC Chairman Ajit Pai in a letter to ensure “that the 600 MHz spectrum that was made available by the [FCC’s] broadcast incentive auction is cleared no later than July 3, 2020, as currently scheduled.”
The $1 billion tranche from the $1.75 billion TV Broadcaster Relocation Fund falls short of the $1.6 billion figure the broadcast industry had sought as an initial outlay. The public notice issued by the FCC’s Media Bureau and Incentive Auction Task Force also depicts a slight increase (from $2.12 billion to $2.14 billion) in total estimated repacking costs submitted to the FCC by broadcasters. However, after conducting a “reasonableness review” in which the FCC found that certain expenses “remained inadequately justified or otherwise not reimbursable,” the agency reduced the aggregate reimbursement demand to $1.86 billion which is closer to, but still exceeds, the $1.75 billion approved by Congress.
As stated in the public notice, the initial $1 billion allocation will provide commercial broadcast stations and MVPDs with access to approximately 52 percent “of their currently estimated and verified costs.” Non-commercial educational stations, which depend on public funding, will receive access to approximately 62 percent of their estimated and verified costs. Based on an analysis of equipment and other costs which require down payments or full prepayment, the FCC determined that an initial allocation of $1 billion is reasonable and will be “sufficient to meet anticipated near-term expenditures.” Emphasizing that the initial allocation “does not reflect the total estimated reimbursement for eligible entities’ actual costs,” the FCC said the timing and amount of subsequent allocations “will be based on careful and continual monitoring of the draw-down amounts as well as revisions to initial cost estimates as more refined data becomes available.” While applauding the FCC’s decision to release money now “so stations can have reasonable repacking costs covered,” National Association of Broadcasters executive vice president Dennis Wharton argued: “the repack would be accomplished more efficiently if the Commission would release more of the $1.75 billion.” Recognizing “the difficult position the FCC is in giving the insufficiency of the repacking reimbursement fund,” an official of America’s Public Television Stations told reporters, “we are hopeful that Congress will appropriate more funding.”
Meanwhile, in their letter to Pai, Representatives Anna Eshoo (D-CA) Doris Matsui (D-CA), Darrell Issa (R-CA), and Steve Scalise (R-LA) joined fifty-two other House members in stressing that rapid deployment of broadcast spectrum assets sold to wireless carriers through the incentive auction “is critical for the U.S. to continue its leadership in technology investment and innovation by providing an on-ramp for 5G network deployment.” As they voiced concern that “delays to the 39-month repacking timeline established by the FCC will impede the billions of dollars of private sector investments . . . necessary for achieving this goal,” the lawmakers maintained that application of the FCC’s waiver process on a case-bycase basis “provides the Commission with reasonable, effective and sufficient procedures to provide flexibility” for broadcasters that may need additional time to complete repacking. As they called on stakeholders “to work together to find creative solutions for faster clearing where possible,” the lawmakers told Pai that, “by encouraging a rapid, reasonable and cost-effective transition of the 600 MHz spectrum, the FCC can help ensure that citizens in rural America enjoy the benefits that reliable, high speed Internet connectivity promises.”