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FCC Considers Eliminating UHF TV Station Fee Discounts

In the early days of analog TV, UHF stations were clearly at a disadvantage. Many TV receivers didn’t include UHF tuners and later when the FCC required receivers to include UHF tuners, tuning in UHF stations was often difficult as the tuners used free-running oscillators relying on automatic frequency control (AFC) to stay on frequency. Tuners also often lacked an RF amplifier,

Additionally, most of the antennas used by viewers did not cover the UHF TV band. Networks didn’t want UHF affiliate and almost all UHF stations struggled to stay on the air, with many failing.

As a result of this, the FCC considered UHF stations less valuable than VHFs, and in 1985 adopted a “UHF discount” when determining compliance with ownership caps.

Now with digital transition complete, many stations that formerly transmitted on VHF channels are now on UHF. Stations that remain on VHF are finding it more difficult to reach viewers due to higher noise levels, interference from various electrical and electronic devices, and antenna size. Viewers may not even realize their favorite station is on a UHF channel, as their sets display “Channel 4.1” even when the station is transmitting on Channel 48.

This use of “virtual channels” and the problems with DTV reception at VHF has made it difficult to justify the higher regulatory fees for stations transmitting on VHF (even if they have a UHF virtual channel) and the corresponding ownership discount for UHF TV stations.

The FCC will resolve the regulatory fee issue next year and has now started a proceeding to eliminate the “UHF discount”.

The Notice of Proposed Rulemaking (FCC 13-123) explains, “Currently, the national television ownership rule prohibits a single entity from owning television stations that, in the aggregate, reach more than 39 percent of the total television households in the nation. In determining compliance with the 39 percent national audience reach cap, the rule provides that television stations broadcasting in the UHF spectrum will be attributed with only 50 percent of the television households in their Designated Market Areas (“DMAs”); this is termed the ‘UHF discount.’”

The Commission noted that the discount was adopted in 1985, in recognition of the technical inferiority of UHF signals to VHF signals and “was intended to mitigate the competitive disadvantage that UHF stations experienced in comparison to VHF stations because of their weaker signals and smaller audience reach.”

As I explained earlier, many broadcasters now consider VHF channels technically inferior to UHF channels. In the NPRM, the FCC seeks “comment on whether a 'VHF discount' should be adopted, as it appears that under current conditions VHF channels may be technically inferior to UHF channels for the propagation of digital television signals.”

As justification for removal of the UHF discount, the NPRM states: “The Commission has acknowledged that UHF spectrum is now highly desirable in light of its superior propagation characteristics for digital television, and that the disparity between UHF and VHF channels has if anything been reversed. In fact, following the DTV transition, some stations that initially elected to operate on a VHF channel have sought to relocate to a UHF channel to resolve technical difficulties encountered in broadcasting on VHF.”

The Commission added that it had examined engineering options to increase the utility of VHF spectrum for digital television and that it “recently determined that annual regulatory fees for UHF and VHF stations will be combined into one fee category beginning in Fiscal Year 2014, eliminating a distinction based on the historical disadvantages of UHF.”

It observed that the UHF discount now “appears only to confer a factually unwarranted benefit on owners of UHF television stations,” adding that if it were to be left in place, “this discount could undermine the 39 percent national audience reach cap on the false predicate that UHF stations do not reach equivalent audiences to VHF stations.”

With regards to a possible “VHF discount,” the NPRM asks if there should be a distinction between high-band and low-band VHF channels and whether the discount percentage should be set at something different than 50 percent.

The FCC is proposing to grandfather existing station combinations or proposed station combinations as of the date of the release of the NPRM to the extent that they exceed the 39 percent national audience cap solely as a result of the termination of the UHF discount rule.

The NPRM does not propose any change in the signal levels used to determine DTV coverage for VHF stations.

Doug Lung

Doug Lung is one of America's foremost authorities on broadcast RF technology. He has been with NBC since 1985 and is currently vice president of broadcast technology for NBC/Telemundo stations.