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NAB Predicts $850 Million Reimbursement Shortfall After Repack

WASHINGTON—The broadcast lobby told regulators it won’t matter what type of form they use to reimburse displaced TV stations after the incentive auction if it doesn’t change its channel-repacking strategy.

“The most important consideration for broadcasters facing repacking is not the form they will need to fill out—it is the number of stations that will be repacked. Ultimately, if the commission proceeds with its wholly unconstrained approach to repacking, requiring well over 1,000 stations to change channels, the best forms, processes and cost estimates the Media Bureau and broadcasters can create will not matter—broadcasters will still be forced to go out of pocket to subsidize the acquisition of spectrum by wireless carriers,” the National Association of Broadcasters said in comments to the Federal Communications Commission.

The commission sought comments on its draft reimbursement forms, released in late September. The forms would be used by broadcasters to qualify for monies from the $1.75 billion fund Congress established to cover some of the costs for relocating to a different channel.

NAB said more than 1,300 TV stations will have to be moved in order for the FCC to clear 84 MHz of the broadcast spectrum. It predicted a $850 million shortfall that broadcasters will have to pick up.

“Consequently, hundreds of millions of dollars in unrecoverable expenses will fall on stations that have literally nothing to gain from the
auction,” the NAB said.

Furthermore, the NAB said, the commission needs to provide more information about how the reimbursement applications will be evaluated. It also said the FCC should clarify what will justify costs that exceed amounts in its cost catalog.

“First… Stations will have essentially no bargaining power with their vendors during this transition,” the NAB said. “Second, due to the compressed, three-month period stations will have for submitting cost estimates, most stations will not actually be able to procure firm costs.”

Third, the lobby said, the commission’s price list, outlined in the Widelity Report, doesn’t reflect realistic locations costs. The NAB suggested the FCC publish and updated version since it came out more than a year ago and the auction will not be held until 2016. It also said certain categories are missing and listed several: Gear for changing translator input channels, land for tower sites, contractual liability with a new tower landlord, changes in tower rent, getting power to a new site, studio-to-transmitter links, legal compliance evaluations, wireless mics, IFBs and headsets, taxes, depreciation and grant-related expenses.

The NAB finally said the forms should be more user friendly, and allow for an unlimited number of characters rather than a set number in text boxes, and that it would help to have catalog costs stated on the form.

The lobby concludes by reiterating its position that “repacked broadcasters remain at risk of being forced to donate hundreds of millions of dollars to subsidize the incentive auction – a problem that a form cannot fix.”

See Doug Lung’s assessment in “FCC Releases Updated Widelity Report.”