Broadcast Spectrum Auctions Now Law
February 24, 2012
President Obama has signed the Middle Class Tax Relief and Job Creation Act of 2012. The Act has the provisions I described in my article Walden Bill Would let TV Stations Use Alternative Transmission Systems last December.
The provision requiring the FCC to "make all reasonable efforts to preserve, as of the date of the enactment of this Act, the coverage area and population served of each broadcast television license, as determined using the methodology described in OET Bulletin 69..." remains. Since the Act was signed by President Obama Wednesday, this effectively freezes TV stations' coverage where it is now. While nothing prevents the FCC from granting coverage increases, they are not required to protect the expanded coverage during the repacking after the auctions are completed. It isn't clear whether "the coverage area and population served" means current licensed coverage or whether it will also include coverage expansion authorized by a construction permit or requested in an application pending at the FCC. Stations that filed applications to move from a VHF to UHF channel after May 31, 2011 are out of luck – the Act prohibits the FCC from granting VHF to UHF channel change applications filed after that date "unless such a reassignment will not decrease the total amount of ultra high frequency spectrum made available for reallocation..."
The Walden bill's provision prohibiting the FCC from reallocating a UHF station to a VHF channel remains, although stations can agree to exchange a UHF channel for a VHF channel and receive compensation through the reverse auction. The status of LPTV stations is unclear. The Act states, "Nothing in this subsection shall be construed to alter the spectrum usage rights of low-power television stations." With the exception of Class A stations, LPTV and translator stations are secondary users. Does this statement mean they will remain secondary and be displaced in the repacking or their spectrum will be protected?
While stations that agree to share a channel with another station will be granted carriage rights on cable systems and other MVPDs—and funds will be available to help the MVPDs make the change—there is no mention of carriage rights for stations that give up all of their spectrum. If the station doesn't have an over-the-air signal, it won't have cable carriage rights.
Stations that need to relocate to other channels will be reimbursed for relocation costs, but the FCC is not required to pay this until three years after the completion of the forward auction. The Act says "to the extent practicable, all such reassignments and reallocations shall become effective simultaneously." Considering that a third or more of all TV stations will need to switch channels, this isn't going to be easy. Overall, the channel relocation is likely to be much more difficult than the analog shutdown.
The rule allowing flexible use of broadcast spectrum in lieu of reimbursement for relocation expenses remains: "a broadcast television licensee may accept, and the Commission may grant as it considers appropriate, a waiver of the service rules of the Commission to permit the licensee, subject to interference protections, to make flexible use of the spectrum assigned to the licensee to provide services other than broadcast television services. Such waiver shall only remain in effect while the licensee provides at least 1 broadcast television program stream on such spectrum at no charge to the public."
When will this happen? Under the Act, the FCC is required to complete the auctions and relocation by Sept. 30, 2022. The Act does not specify a minimum time period.
The Act includes a very odd section regarding channel 37. It allows reimbursement of cost for "a channel 37 incumbent user, in order to relocate to other suitable spectrum, provided that all such users can be relocated and that the total relocation costs of such users do not exceed $300,000,000. For the purpose of this section, the spectrum made available through relocation of channel 37 incumbent users shall be deemed as spectrum reclaimed through a reverse auction under section 6403(a)." I didn't think there were any incumbent channel 37 users except for medical devices and radio astronomy. The interstellar objects can't be reallocated to another channel, even for $300,000,000, so this would appear to apply to medical devices. Why would the FCC need to relocate incumbent users unless it plans on using channel 37 for wireless broadband?
We have seen the problems poor receiver interference rejection can cause in the LightSquared debacle. Section 6408 requires the Comptroller General of the United States to conduct a study that includes the value of improving receiver performance, improving the operation of services located in adjacent spectrum, and narrowing the guard bands between adjacent spectrum use. This is unlikely to affect interference studies for broadcaster to broadcaster interference, since the Act specifies use of OET-69, but could impact the interference to broadcast and broadcast auxiliary spectrum from other users. The study results have to be submitted to Congress not later than one year after the enactment of the Act.
Operators of microwave systems in the 11 GHz, 18 GHz and 23 GHz bands may see tougher restrictions on bandwidth usage and antenna performance standards after the GAO study required by the Act. The Comptroller General is required to conduct a study and report on the rejection rate of applications, either by the FCC or by private coordinators, for new links in these bands due to interference with existing links. That study is due no later than 9 months after enactment of the Act.
Thanks to the efforts of NAB and state broadcaster associations, the worst fears of what would happen from the FCC implementing the recommendations of the National Broadband Plan have been allayed, but there are still many unanswered questions. Perhaps foremost is what the FCC will consider "all reasonable efforts" to protect coverage. Currently the de-minimis interference level is 0.5 percent. Will that stick or will the FCC try to move it back to the 2 percent per case or 10 percent total allowed during the DTV transition? While the use of OET-69 provides some consistency with previous interference studies, I've pointed out the problems with it, particularly the FCC's use of the horizontal plane radiation pattern in determining protected contours for OET-69. This results in stations in Los Angeles showing up with more coverage to the north than south over Los Angeles, when in reality the opposite is true.