$10 Billion Payment Process Specified

WASHINGTON—Broadcasters who sold spectrum in the federal government’s recently concluded incentive auction are still on the hook for any debts owed to the Federal Communication Commission.

“In all cases where a debt is owed, the commission will withhold an amount that is sufficient to pay the debt in full, including interest, penalties and costs that have accrued or will accrue if an appeal or request to waive compromise is timely filed,” the FCC’s auction payment public notice stated. Specifically, the “Procedures for Submitting Financial Information Required for the Disbursement of Incentive Payments and Reimbursement Payments After the Incentive Auction Closes” Public Notice, issued March 29, 2017.

Broadcasters collectively won more than $10 billion for 84 MHz of TV spectrum in the incentive reverse auction, which concluded Jan. 13. (See “Broadcasters Seek $10 Billion for 84 MHZ.”) Now that the final phase of the auction is completed, the commission is lining up the payment procedure for those winning broadcasters, who must jump through some hoops first.

Minus debts (acknowledged by winners on their bidding applications), payments will be made in single disbursements to winning bidders or their certified third-party designee, with the FCC held harmless should something go amiss along the way, and an “acknowledgment” that a payee doesn’t show up on the U.S. Treasury’s “Do Not Pay” portal.

Payments to broadcasters going off the air will take into account the status of the license and whether or not it was subject to a non-final revocation or cancellation order; and in the case of a Class A, a non-final downgrade.

With these parameters in mind, reverse auction winners must submit FCC Form 1875, in both paper and electronic form, to the commission for confirmation of bank account direct-deposit information. The commission is sending “one blank FCC Form 1875 for each station with a winning bid via overnight mail to the contact person” listed on the winners’ auction application. This form will have to be completed and submitted “within 20 business days” after the commission releases the Closing and Reassignment Public Notice, expected in mid-April.

These hard-copy forms must be mailed to:
Federal Communications Commission
Travel & Operations Group, Attn: Chief of TOG
9300 East Hampton Dr.
Capitol Heights, MD 20743

The information must also be electronically submitted to the Commission’s Registration System—CORES—Incentive Auction Financial Module, by an authorized agentone per facility ID number—over a computer with a minimum of Windows 7 and TLS 1.1 security. No smartphones or tablets; and third-party browser toolbars are discouraged to keep hack attacks at a minimum.

The timingof payments cannot be assured. Payments are tied to the collection of auction proceeds from wireless providers who bought the 84 MHz of TV frequencies. The commission said it would grant spectrum licenses to—and thus, collect payments from—the winners on a “rolling basis,” as it has with previous auctions.

When the commission is ready to direct the Treasury to disburse payments, a “Ready to Pay” Public Notice listing each station with a winning big will be released. Neither can the timing of this PN nor the payments themselves be anticipated, so “a station with a winning bid will be considered to have received its incentive payment five business days after the date of the “Ready to Pay Public Notice” stating that the incentive payment for the particular station with a winning bid is ready to be disbursed.”

Last week’s auction payment public notice also addressed reimbursement payments to eligible broadcasters and pay TV operators. See “$1.75 Billion Reimbursement Process Outlined.”

For more TV Technology coverage, see our spectrum auction silo.