NAB to FCC: Two Repack Simulations Aren't Enough

FCC report creates more questions than answers, NAB says
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WASHINGTON—Two post-incentive auction repack simulations are insufficient. That is the message the National Association of Broadcasters is delivering to the Federal Communications Commission this week. The NAB sent letters and spoke with FCC staffers Monday and Tuesday to say more sims are necessary for TV stations to plan for post-auction relocation.

“By contrast, last summer the FCC released 100 repacking simulations,” the NAB’s Rick Kaplan said in a July 14 letter disclosing phone conversations with FCC staff members. “This information enabled outside parties, including NAB, to draw meaningful conclusions concerning, for example, the likelihood of certain outcomes. In this instance, releasing only two simulations per clearing target is akin to asking a person to accurately predict the National League pennant winner by watching only two games from the 162-game Major League Baseball schedule.”


The FCC's Three Clearing Target

Simulation Assumptions

  • The 84 MHz simulation assumed 40 to 50 percent participation assuming “major network stations, [the] largest non-major network station in each DMA, stations with enterprise value of more than $100 million and [the] two largest PBS stations in each DMA” do not participate.
  • The 114 MHz simulation assumed 50 to 60 percent participation assuming the “four largest major network stations,” those worth more than $100 million, and the biggest PBS do not participate.
  • The 126 MHz simulation assumed 60 to 70 percent participation except for “major network stations in top 25 markets, [the] three largest major network stations in markets 26-100, [the] two largest major network stations in markets 100-plus, and [the] largest PBS station in each DMA.”

The NAB’s concerns were raised by information released late Friday by the FCC’s Incentive Auction Task Force chief, Gary Epstein, on a proposal to minimize the number of TV stations stranded in the guard band between up- and downlink wireless spectrum, aka the “duplex gap.” The commission expects to have to stick a few stations into the duplex gap if there is not enough space for them in the TV band after the auction. Neither broadcasters nor wireless providers are wild about the idea of TV stations in the duplex gap.

The information released by Epstein indicates the FCC ran two simulations each for clearing targets of 84, 114, and 126 MHz. Different levels of broadcaster participation were assumed for each scenario. (See sidebar.)

The NAB’s Kaplan wrote to Epstein on Monday, July 13, asking for more details about the scenarios, i.e., which major networks and how affiliation was determined; whether “PBS” indicated all non-commercial stations or just PBS member stations; and what constituted the “largest” stations—population, coverage, power or ratings.

The simulations also assumed all Canadian stations were “fixed;” meaning exactly what, and how border interference data was incorporated, Kaplan asked. He also wanted to know how the participation levels were derived for each clearing target.

In his July 13 letter to Epstein, Kaplan said the NAB assumed the FCC did more than two simulations for each clearing target and asked for the additional data. By Tuesday, however, FCC staffers confirmed there were no additional simulations.

“There is little to be gained from analyzing a mere six simulations,” Kaplan said in his July 14 letter. “…To make matters worse, according to FCC staff, those are the only simulations they have performed. It is almost incomprehensible how, with the incentive auction just months away, FCC staff has not conducted more than a pair of simulations for each clearing target.”

Further, Kaplan said, the assumptions made in the simulations were unclear, “and to the extent they are understood, way off base.” For example, the simulations assume stations worth more than $100 million won’t participate, even though the FCC previously published anticipated compensation numbers that far exceed that figure.

​“Ultimately, the information released late Friday night suggests deep problems with the auction or a significant lack of transparency, or both,” Kaplan concluded. “If there is more information to provide, the FCC should do it, and do it expeditiously so as to avoid any delay. If what was released is the extent of the information available, stakeholders should be wary of what is to follow. It is critical that the FCC makes reasoned, well-informed decisions. That can only happen from testing its systems and soliciting public input. This is nowhere truer than where, as here, the chairman is asking his colleagues eschew a prior commitment and place TV stations in the duplex gap.”