Articles Posted in Low Power & Class A Television

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The FCC has announced that the preliminary television channel sharing rules in the FCC’s Report and Order in the Innovation in Broadcast Television Bands proceeding will become effective on June 22, 2012. The rules establish the basic framework by which two or more full-power/Class A television stations can voluntarily choose to share a single 6 MHz channel. Channel sharing is integral to clearing the television broadcast spectrum so that the FCC can auction it for wireless broadband as called for in the National Broadband Plan. The rules follow the signing of the “Middle Class Tax Relief and Job Creation Act of 2012”, which we discussed in detail in a previous post. Also called the “Spectrum Act,” that law gives the FCC authority to conduct incentive auctions to encourage television broadcasters to get out of the business or find new business models that rely on less spectrum, such as doubling up with another station on a single 6 MHz channel.

The FCC’s new rules allow a station to tender its existing 6 MHz channel to the FCC, making it available for the “reverse” or “incentive” spectrum auction. The tendering station can set a reserve price below which it won’t sell. To encourage more stations to participate in the auction, the FCC is also permitting stations, in advance of the auction, to agree to share a single 6 MHz channel after the auction. In this scenario, one of the two stations would tender its channel into the auction, and both stations would share the proceeds and operate on the remaining 6 MHz channel after the auction. The FCC’s Order makes clear that channel sharing arrangements will be voluntary, and that stations will be “given flexibility” to control some of the key parameters under which they will combine their operations on a single channel, including allocation of auction proceeds among the parties.

Each station sharing a 6 MHz channel will be required to retain enough capacity to transmit one standard definition stream, which must be free of charge to viewers. Each will have its own separate license and call sign, and each will be subject to all of the Commission’s rules, including all technical rules and programming requirements. Stations that agree to share a channel will retain their current cable carriage rights. Commercial and noncommercial full-power and Class A TV stations are permitted to participate in the incentive auction and enter into channel sharing agreements, but low power TV and TV translator stations are not.

Many more details will have to be resolved prior to the incentive auction. We recently discussed the procedural uncertainties surrounding the auction in a detailed and comprehensive interview conducted by Harry Jessell of TVNewsCheck. The transcript of the interview can be found here. At bottom, we concluded that the largest obstacle facing the FCC will be designing the auction so that a sufficient number of broadcasters find it attractive to participate.

The FCC invited us and other industry experts to participate in a Channel Sharing Workshop earlier this week. In the meantime, other Pillsbury attorneys have been actively helping stations assess the risks and opportunities of the incentive auctions, including spectrum valuation and strategies for the forward and reverse auctions and spectrum repacking. Many of the issues raised at the FCC’s Channel Sharing Workshop dealt with the intricacies of the arrangements broadcasters will have to craft to govern their relationship with a channel sharing partner. These ranged from how multiple channel “residents” will manage capital investments in facilities upgrades, to what might happen if one licensee on a shared channel goes bankrupt, sells, or turns in its license. A recording of the Workshop can be accessed here.

The FCC acknowledged that much work lies ahead of it. To that end, the FCC announced at the Workshop that the first of a series of Notice of Proposed Rulemakings concerning issues raised during the Workshop will be released in the Fall. The FCC did not predict a timeframe for completing the auction design process and establishing service rules.

As these and other issues take the fore, television broadcasters must remain engaged, shaping the process to allow them the maximum flexibility to develop relationships and business models that can thrive in the post-auction environment.

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The FCC has issued its latest annual Notice of Proposed Rulemaking containing regulatory fee proposals for Fiscal Year 2012. Those who wish to file comments on the FCC’s proposed fees must do so by May 31, 2012, with reply comments due by June 7, 2012.

The FCC’s NPRM includes an interesting twist. Citing the “rapid transformation” of the communications industry, the FCC indicates that it plans to re-examine its regulatory fee program which has remained largely the same since the program was first introduced in 1994. According to the NPRM, the FCC will be undertaking two separate “Reform Proceedings” in the near future to address the Commission’s regulatory fee program. In the first phase, the FCC will consider the allocation percentages of core bureaus involved in regulatory fee activity and how it calculates those percentages. In the second phase, the FCC states that it will review other outstanding substantive and procedural issues. According to the FCC, “given the breadth and complexity of the issues involved, the issuance of two separate Notices of Proposed Rulemaking will permit more orderly and consistent analysis of the issues and facilitate their timely resolution.”

We will be publishing a full Advisory on the FY 2012 Regulatory Fees once they are officially adopted (likely this summer) and will keep you posted regarding the Phase I and Phase II Reform Proceedings. You may also immediately access the FCC’s FY 2012 proposed fee tables in order to estimate the payments (barring changes) that you will owe in September.

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The FCC created a stir in the broadcast community when, after proclaiming for more than a year that surrendering broadcast channels for the planned broadband spectrum auction would be entirely voluntary, it began to “volunteer” Class A stations it concluded had not complied with all FCC rules. I first raised this issue in a February post on the day the FCC released the first sixteen Orders to Show Cause demanding that the recipient Class A TV stations submit evidence as to why the FCC should not revoke their Class A status for infractions that would have previously drawn only a fine.

Loss of Class A status not only eliminates protection from being displaced by full power TV stations (or by a spectrum auction), but also disqualifies the station from sharing a post-auction channel with a full power station or seeking any compensation for its spectrum in the auction. Downgrading Class A stations to LPTV status therefore allows the FCC to sweep them aside involuntarily to clear spectrum for the auction, and avoid sharing the proceeds of the spectrum auction with that licensee.

It was therefore not too surprising when that initial batch of FCC orders was followed by dozens of subsequent FCC actions against Class A stations, some of which proposed substantial fines and indicated that the licensee had been earlier informed it could avoid a fine by notifying the FCC it wished to relinquish its Class A status.

Having put scores of stations on notice that their Class A status was either directly at risk or that they could avoid a fine by agreeing to relinquish Class A status, the FCC turned up the heat further this past week when it began issuing follow up orders revoking stations’ Class A status. While the writing was already on the wall for many of these stations given the FCC’s earlier actions against them, one of the orders offers a particularly disturbing insight into the determination with which the FCC is moving to thin the ranks of Class A stations (old FCC motto for Class A stations–“last bastion of independent voices in a consolidated TV world”; new FCC motto for Class A stations–“old and in the way”).

Station KVHM is (or at least was) a Class A station that received a pair of investigatory letters from the FCC in late March and early August of 2011. According to the FCC, the letters noted that the station had failed to file required children’s television reports and provided the licensee with thirty days to respond, making the first response due at the end of April 2011. However, as the FCC itself notes in the Order, the licensee, Humberto Lopez, died in May of 2011. According to his obituaries, Mr. Lopez, who owned multiple TV and radio stations and was an inductee of the Tejano Roots Hall of Fame, died “on May 16 after battling a long illness.”

In the last few weeks of his life, he apparently didn’t find time to respond to the FCC’s March letter, and was certainly unable to respond to its August letter. His failure to respond led the FCC to issue a February 2012 Order to Show Cause demanding that Lopez demonstrate why his Class A status should not be revoked. When, not surprisingly, the licensee was unable to deliver that message from beyond the grave, the FCC issued last week’s Order, stating “Lopez did not file a written statement in response to the Order to Show Cause, and, therefore, we deem him to have accepted the modification of the KVHM-LP license to low power television status.” Talk about being tough on a licensee; the FCC demanded not just that Lopez rise from the grave to defend his Class A status, but that he do so in writing.

While it is easy enough to ridicule an FCC Order that is on its face so completely preposterous as to invite comparison with the worst cinematic portrayals of soulless bureaucracy, the real lesson of this case can be found by delving a bit deeper into the facts. On the FCC’s side of the ledger, it is true that the first investigatory letter did arrive while the licensee was still alive, and that it was at least theoretically possible the licensee could have responded. Had the FCC’s Order been based on this fact alone, rather than on the licensee’s failure to respond long after his death to the 2012 Order to Show Cause, its action would have been hard-hearted, but perhaps defensible. The FCC could have argued that, given the licensee’s failure to meet the original response deadline, his estate lacked the “clean hands” necessary to protest the loss of Class A status, and that the FCC was just playing the hand it was dealt. However, as it turns out, the FCC lacked clean hands as well.

Why, you may ask, did the licensee’s estate not step up to oppose the Class A revocation? Apparently because it is still waiting for the FCC to grant the application to transfer control of the station from the deceased licensee to the licensee’s estate (controlled by an Executor). Despite the fact that such post-death transfers are normally accorded nearly automatic grants, that application remains pending at the FCC since early November 2011. Worse, the apparent reason why the transfer application is hung up at the FCC is because the FCC has still not acted on the station’s 2006 license renewal, which also remains pending. To be blunt, the licensee literally died waiting for the FCC to act on his license renewal application. While the FCC will often sit on a transfer application until the underlying station’s license renewal is granted based on the theory that the “seller” shouldn’t profit from the transfer of a station unless the FCC can first determine he was qualified to own it, the licensee here is beyond caring about such profit.

So in the fair world we like to think we live in, the FCC would have promptly granted the station’s transfer application (and perhaps its license renewal application as well), transferring control of the station to the Executor of the licensee’s estate. Without altering its timetable one iota, the FCC could then have proceeded to issue its February Order to Show Cause, and the Executor would have had a reasonable opportunity to try to defend the station’s Class A status. Instead, in its apparent haste to clear “voluntary” spectrum for auction, the FCC cut all of these procedural corners, leaving Lopez’s wife and (according to the obituary) twelve children with an asset of significantly diminished value, and no opportunity to seek their share of any spectrum auction proceeds.

What is particularly ironic is that the Lopez family is the archetype of the kind of licensee the FCC has argued will be interested in participating in the auction–a licensee that may no longer be as interested in running the station as in monetizing it to pay estate taxes and to split any remaining proceeds among the many heirs. The FCC has placed itself in the role of the cattle baron who dams up the stream, depriving his neighbors of water so that he can obtain their land for next to nothing (or in this case, nothing). If the FCC’s thirst for broadcast spectrum has become so intense that it is willing to sacrifice fundamental fairness and “widows and orphans” to get it, all broadcasters need to be looking over their shoulders for the next regulatory lightning bolt encouraging them to also “volunteer” their spectrum. Like death and taxes, it appears the FCC is determined to make surrendering spectrum for the auction an unavoidable fact of life (and death).

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As many of you know by now, very few topics were hotter during the NAB Show in Las Vegas this week than the FCC’s looming April 27 public meeting vote to decide how to implement its proposals to require online posting of TV station public inspection files. As Laurie Lynch Flick reported previously here, the FCC is proposing to require television broadcasters to replace their existing locally-maintained public inspection files with digital public inspection files to be maintained online, including stations’ political records. The online public file has broadcasters concerned because creating and maintaining a centralized online public file substantially increases their public inspection file burdens, while the political portion of the file contains sensitive competitive and pricing information that broadcasters would prefer not be made available to competitors online on a near real-time basis.

The proposals have proven to be so controversial that earlier today the National Association of Broadcasters (NAB) filed a request with the FCC to grant a two business day delay of the commencement of the “sunshine period” in the FCC’s online public file proceeding. For those who are not familiar with the “sunshine period” requirement, the term refers to the week before one of the Commission’s monthly public business meetings (known as “open meetings”) during which time all contacts with Commission staff concerning the matters to be decided at the meeting are prohibited, until such time as the text of the Commission’s decision is publicly released. The sunshine period for the online file proceeding is scheduled to commence today, and the NAB is asking the FCC to delay the effective date until next Tuesday, April 24, in order to allow interested parties to continue to discuss the FCC’s proposals with FCC staff members.

To make matters even more interesting, yesterday a media placement company asked the FCC to refrain from going forward at the April 27 meeting with any requirements regarding placing political files online.

The precise details of the FCC’s online public file requirements, including those for the political file, aren’t likely to be released until the FCC’s April 27 monthly meeting. However, during discussions at the NAB Show, FCC staff informed broadcasters that the FCC’s Order is expected to, at a minimum, require online posting of public inspection files by all television stations this year, with the posting of the online political file portion of the public file to be phased in, initially applying to network-affiliated stations in the top 50 markets. All other television stations would be required to move their political files online within the next two years.

Regardless of the precise approach taken by the FCC for putting political file information online, stations would be wise to ensure that their current political file is complete and that their political sales practices comply with the numerous legal requirements. Moving a poorly kept political file online is an invitation to trouble.

A good place to start for ensuring your political file compliance is with our Political Broadcasting Advisory, which is regularly updated and is a comprehensive guide for broadcasters to use to help them comply with the FCC’s political broadcasting rules, including the political file requirements. The time to fix any public file/political file and political sales problems is now, before the data has to be posted on the Internet.

As the details of the Order the FCC is expected to release on April 27 leak out, the FCC continues to revise its positions and there may be a few more twists and turns before we are done. The FCC has moved this item to the front burner of its agenda about as fast as any in recent memory. What makes it more of an immediate concern for TV broadcasters is that the item will be released just prior to the time TV stations are preparing for what is expected to be the most expensive presidential campaign advertising blitz on record.

As the online public file/political file debate rages on, there can be no doubt we will have plenty more to discuss regarding these issues in the coming days and weeks ahead.

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Late last month I wrote about a strange occurrence at a number of TV stations that were visited by FCC inspectors demanding that the station make a copy of its entire public inspection file in 24-48 hours and provide that copy to the FCC.

I commented at the time that this highly unusual event was more likely connected to the FCC’s pending proceeding to move the public inspection file online than to any enforcement action, noting that “while this would seem bizarre any place outside of Washington (well, it’s bizarre here too, but you get used to that after a while), the FCC has been on the receiving end of numerous comments and declarations from broadcasters noting how large the public inspection file has become, and how burdensome and time-consuming it would be to require stations to scan the entire contents of it for the sake of posting it online.” It therefore seemed likely that the FCC was not so much interested in the substance of each station’s public file as in determining the sheer size of those files. Regardless, stations with the misfortune of being on the receiving end of these requests had to absorb the overtime and copying costs involved to comply.

Since that time, the FCC has scheduled a vote at its April 27 meeting to require that the public file, including the political file portion of it, be posted online. The timing of the planned vote is not a good sign for broadcasters, as it is a long-standing FCC tradition to schedule votes on orders that are favorable to broadcasters so that they can be released just before the NAB Show, ensuring that FCC commissioners speaking at the NAB Show will receive a warm reception. Conversely, FCC orders that broadcasters are not going to be happy about tend to be delayed until after the NAB Show concludes. With the FCC’s scheduled vote coming the week after the NAB Show, it should surprise no one that the FCC appears ready to adopt an order requiring that public files (including the political file) be moved online.

On the good news side, the FCC appears to be dropping its proposals to require that certain inter-station agreements and sponsorship identification lists be added to the file, either because broadcasters’ complaints about those proposals were heard, or because the FCC saw them as unnecessary judicial baggage in an order that it would like to see implemented quickly.

Returning, however, to the mystery of why the FCC was demanding copies of stations’ public files, the last document placed in the FCC’s record in the online public file proceeding this past Friday (just before the holiday weekend) is illuminating. It is a one-page “Submission for the Record” from the Media Bureau noting that “[t]he Commission requested a copy of the public file from all broadcast stations in the Baltimore DMA in March of 2012, received the documents either on paper or electronically, and subsequently reviewed each file, counting the total number of pages in the following categories….” The Submission then notes the total number of pages in each file (with the award for the largest file going to WJZ-TV, at 8,222 pages), and breaks out the number of pages in the categories of Political File, letters/emails from the public, documents currently available online at the FCC, and documents the FCC found extraneous to the file. This certainly appears to confirm that the FCC’s goal in demanding that stations rapidly provide a copy of their entire public file was merely to determine the quantity, and not the quality, of those files. By placing that information in the public record, the FCC can now rely on it in its decision to implement an online public file requirement (although how it supports that result is still unclear).

While one can question the burden placed on individual stations merely to determine the number of pages in a public inspection file (which is information that is already in the record, having been submitted in numerous broadcasters’ comments), once that information has been gathered, it is fair for the FCC to make use of it by placing it in the record. What is curious, however, is the effort the FCC appears to have expended to do so as quietly as possible. In addition to it being dropped into the record right before the holiday weekend, the Submission itself is an unusual document. It is not on letterhead, it is not dated, and it is not signed. If it were not for the fact that the FCC’s filing system indicates it was submitted by the Media Bureau, you might well wonder where it came from. There may, however, be a reason for this.

When the FCC moved its public comment system online, the FCC and communications lawyers quickly found that the number of one-page submissions from the public stating a position but providing no supporting rationale exploded exponentially. The result was that it became difficult to locate the more substantive comments filed in a proceeding, as they were lost among hundreds or thousands of short “me too” submissions. To the FCC’s eternal credit, it modified its comment search filter so that you can exclude “Brief Comments” from your search, allowing you to focus on the more substantial comments filed. Parties actively following a proceeding therefore tend to use this option and exclude “Brief Comments” when checking the record.

By eliminating all extraneous information, the FCC was able to keep its Submission down to one page in length, and as it turns out, the system’s definition of a Brief Comment is one that is one page long, meaning that those using the search filter will not see it. That may well be nothing more than a coincidence, but it would at least explain the unusually brief and cryptic nature of the FCC’s Submission. But if that is the case, we have just traded one mystery for another–having gone to such lengths to gather this information, why is the FCC being so shy about having found it?

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As the FCC’s proceeding to require television stations to place their public inspection files (including their political files) online heats up, life is becoming strange for a number of television stations around the country. In a move presumably connected with the online public file proceeding, FCC inspectors have appeared at television stations in several markets and demanded that the stations provide them with a complete copy of their entire public inspection files within 48 hours or less. Given that most public files are measured in yards, not feet, of paper, there are a lot of broadcast employees burning the midnight oil trying to comply.

But why such a strange and burdensome request? If the FCC wanted to merely determine whether a station’s file is complete, it can just look at the original file during its visit to the station–it doesn’t need its own copy. Besides, the fact that a document is missing from the duplicates provided to the FCC would be weak evidence that the station’s actual file is defective, since it would hardly be surprising if a few documents failed to get copied in this highly rushed process.

Alternatively, if the FCC were doing an in-depth audit of a specific portion of the file (for example, the EEO section) which is difficult to thoroughly review while at the station, FCC personnel could request copies of just that portion of the file. In asking for a copy of the entire file, it appears that the FCC is not particularly interested in the substance of those copies, but in how quickly the station can produce them (particularly since there appears to be no massive emergency file review going on at the FCC actually requiring rapid access to copies of the entire file).

While this would seem bizarre any place outside of Washington (well, it’s bizarre here too, but you get used to that after a while), the FCC has been on the receiving end of numerous comments and declarations from broadcasters noting how large the public inspection file has become, and how burdensome and time-consuming it would be to require stations to scan the entire contents of it for the sake of posting it online. Broadcasters have argued that this burden is hard to justify given that very few members of their local communities have ever expressed the slightest interest in seeing the public file, online or otherwise.

While scanning and posting the content of a public file online will obviously be far more time consuming than just making copies of it, these recent events may suggest that the FCC considers them sufficiently analogous to attempt to prove a point–that scanning every document in a public file is not as time-consuming as many broadcasters have claimed, and is therefore not a fatal flaw in the online file proposal, either from a public interest or Paperwork Reduction Act perspective. Or, the Commission may think broadcasters are bluffing about the size of their public files, and want to prove that they are really not as extensive as claimed. Apparently, the FCC has not realized just how many station renewal applications remain pending for years after filing due to indecency and other complaints, requiring stations to maintain data in their files even longer than usual.

Unfortunately, the affected broadcasters are now caught in the middle, and face a conundrum: attempt to move heaven and earth in an effort to meet the FCC’s seemingly arbitrary deadline, or risk being accused by the FCC of failing to provide the requested information by the deadline set by the FCC (or both, for the many stations that pull out all stops and still have no hope of meeting the FCC’s stated deadline). Particularly ironic of course is that stations that manage to pull it off in anything close to that time frame may well have that fact presented to them as the very reason why it is not unduly burdensome to have them repeat the process when posting their file online.

As a broadcaster, the obvious thing to do when the FCC may be coming to your door is to make sure that your public inspection file is complete and up to date. However, if the actual point of this exercise is not to look at the substance of what stations produce, but at how fast they can produce it, then these unfortunate stations have been tasked with the regulatory equivalent of a snipe hunt.

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The FCC today issued a Public Notice officially launching the television station license renewal cycle. The Public Notice, however, also contains an unusual new request. Specifically, the FCC asks that television station licensees or their counsel log into their accounts in the FCC’s Consolidated Database System (CDBS) and update the licensee’s and its counsel’s contact information using the Account Maintenance function. The FCC will use this information to e-mail stations a reminder that their license renewal application is due. This is a new use of the CDBS system and makes one wonder how else the FCC will be able to use CDBS to communicate with licensees in the future.

Licensees that do not have a CDBS account must create one, since, as the FCC notes, all renewal filings must be made electronically. Licensees creating new accounts, however, must both create the new account and immediately use it to file a Change in Official Mailing Address form, which is found by clicking on the link labeled “Additional non-form Filings.” Existing account holders making changes to their contact information must also follow this procedure.

The Public Notice announces that license renewal applications can be filed beginning on May 1, 2012. The first stations to file will be television stations licensed to communities in Maryland, Virginia, West Virginia, and the District of Columbia, which must begin airing pre-filing announcements starting on April 1, and file their renewal applications by June 1, 2012. We note that even though the FCC has announced that applications can be filed as early as May 1, stations should not file in advance of the schedule for their state, and that full power licensees in the first group of stations will still be airing pre-filing announcements until May 16 and should file their applications after that date.

The FCC’s Public Notice also contained some other pointers to jog memories, since most stations have not had to file this particular application in eight years. Specifically, it noted that the obligation to file a renewal application applies to all TV, Class A TV, LPTV, and TV Translator stations (even those that may still be waiting for their last renewal application to be granted), that a Form 396 EEO filing must also be made, and that noncommercial licensees must submit an Ownership Report on Form 323-E as well. Finally, the FCC reminded stations that they will need to respond to a new question which asks them to certify whether their advertising sales contracts have contained a non-discrimination clause since March 14, 2011.

The major point of the Public Notice, though, was unmistakeable. “Failure to receive a notice does not excuse a licensee from timely compliance with the Commission’s license renewal requirements.”

We’re here to help.

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I wrote in February about a sudden deluge of nearly identical FCC decisions, all released on the same day, proposing to revoke the Class A status of sixteen LPTV stations for failure to timely file all of their Form 398 children’s television reports. While I noted at the time that the affected licensees had done themselves no favors by apparently failing to respond to FCC letters of inquiry, the decisions were still somewhat surprising in that the FCC has traditionally fined Class A stations for rule violations rather than revoked their Class A status. Class A status is important because it provides LPTV stations with protection from being displaced by full-power TV stations, and is now more important than ever, as the recently enacted spectrum auction legislation allows Class A stations both the opportunity to participate in auction revenues, and protection from being eliminated in the broadcast spectrum repacking associated with the auction.

Given the peculiar timing of the FCC’s decisions (just days after the spectrum auction legislation became law), the sudden shift from fines to Class A revocation, and the release of sixteen such decisions at the same time, the decisions raise the specter that the FCC may be moving to delete the Class A status of non-compliant stations in order to facilitate clearing broadcast spectrum as cheaply as possible in preparation for the newly-authorized wireless spectrum auction. Within a few days of my post, a number of trade publications picked up on this possibility as well. The result was a lot of Class A stations checking to make sure their regulatory house is in order, and a growing concern in the industry that these decisions might be the leading edge of an FCC effort to clear the way for recovering broadcast spectrum for the planned auction.

While that may still turn out to be the case, I was nonetheless at least somewhat relieved to see a trio of decisions released this morning by the FCC that are largely identical to the February decisions with one big exception–the FCC proposed fining the stations for failing to file all of their children’s television reports rather than seeking to revoke their Class A status. Specifically, the FCC proposed fining two of the licensees $13,000 each, and the third licensee $26,000 (because it had two stations that failed to file all of their reports).

Each $13,000 fine consisted of $3000–the base fine for failing to file a required form–and an additional $10,000, which is the base fine for having such documents missing from a station’s public file. While a $13,000 fine is painful, particularly for a low power station, loss of Class A status could be far more devastating for these stations, and for Class A stations in general. Setting aside spectrum auction considerations, buyers, lenders and investors will be hesitant to risk their money on Class A stations that could suddenly lose their Class A status, and shortly thereafter be displaced out of existence. Stated differently, those considering buying, lending to, or investing in Class A stations will want to do a thorough due diligence on such stations’ rule compliance record before proceeding.

So why did the FCC propose fines for these stations while the sixteen stations in the February decisions were threatened with deletion of their Class A status? Although today’s decisions and the February decisions are similar in many respects, there is one big distinction. Unlike the licensees in the February decisions, the licensees named in today’s decisions promptly responded to the letters of inquiry sent by the FCC, and upon realizing that they had failed to file all of their children’s television reports, belatedly completed and submitted those reports to the FCC. While that didn’t stop the FCC from seeking to fine these stations, it does seem to have avoided a reexamination of their Class A status.

While the FCC’s February decisions to pursue deletion of Class A status are still a worrisome development for all Class A stations, today’s decisions thankfully shed some much needed light on when the FCC is likely to pursue that option, and when it will be satisfied with merely issuing a fine. As I noted in my earlier post, a licensee that fails to promptly respond to a letter from the FCC is living life dangerously, and today’s decisions confirm that fact. As a result, Class A stations should continue to make sure that their regulatory house is in order, and if they receive a letter of inquiry from the FCC, should contact their lawyer immediately to timely put forth the best possible response to the FCC.

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Following many months of debate and after trying several potential legislative vehicles, the House and Senate finally enacted spectrum auction legislation as part of the bill to extend payroll tax cuts for another year. It was signed by the President last week, and for those following the process for the past two years, the result was somewhat anticlimactic. That is mostly good news for broadcasters, as the NAB was successful in ensuring that the law contains enough protections for broadcasters to prevent the spectral armageddon that it once appeared broadcasters might face.

Having said that, we can’t ignore that there were bodies left out on the legislative battlefield, the most obvious being low power TV and TV translator stations. Under the new law, these stations are not permitted to participate in the spectrum auction, are not protected from being displaced to oblivion in the repacking process, and are not entitled to reimbursement of displacement expenses. It is that last point that may be the most important in rural areas. While it is possible there could be enough post-repacking broadcast spectrum in rural areas for TV translators to survive, they will still need to move off of the nationwide swaths of spectrum the FCC intends to auction to wireless companies. Unfortunately, many if not most TV translator licensees are local and regional entities with minimal financial resources. Telling such a licensee that it needs to move to a new channel, or worse, to a different location to make the new channel work, may be the same as telling it to shut down.

This is particularly true when the sheer quantity of translator facilities that might have to be moved is considered. For example, there are nearly 350 TV translators in Montana alone. Moving even a third of them will be an expensive proposition for licensees whose primary purpose is not profit, but the continued availability of rural broadcast service. Further complicating the picture is the fact that in border states like Montana, protecting spectrum for low power TV and TV translators will inevitably be a very low priority when negotiating a new spectrum realignment treaty with Canada or Mexico to permit reallotment of the band.

While full-power and Class A television stations therefore fared much better in the legislation, for those uninterested in selling their spectrum, spectrum repacking will still not be a pleasant experience. Those of us who endured the repacking process during the DTV transition can attest to how complex and challenging the process can be, and the DTV process had the luxury of fifteen years of planning and execution, as well as a lot more spectrum in the broadcast band with which to work. Having already squeezed the broadcast spectrum lemon pretty hard during the DTV transition, the FCC may find that there isn’t much juice left in it for a second go around. That, combined with a much tighter time frame, could make this an even more complex and messy process.

In addition, while it hasn’t drawn as much attention as it should have, one other changed factor is that after the DTV transition was completed, the FCC opened up TV “white spaces” (spectrum between allotted broadcast channels) for unlicensed use by technology companies seeking to introduce new products and services requiring spectrum. Having enticed companies into investing many millions of dollars in research and development for these white spaces products and services, eliminating the white spaces during the repacking process (which is the point of repacking) could leave many of these companies out in the cold. This is a particularly likely outcome given that the very markets white spaces companies are interested in–densely populated urban areas–are precisely those areas where the FCC most desperately wants to obtain additional spectrum for wireless, and where available spectrum is already scarce. Like low power TV and TV translator licensees, these white spaces companies are pretty much going to be told to “suck the lemon” and hope there are a few drops of spectrum left for them after the repacking.

Still, while there certainly are some obstacles to overcome, the DTV transition gave the FCC staff priceless experience in navigating a repacking, and the FCC already has ample experience auctioning off spectrum. The question is whether this particular undertaking is so vast as to be unmanageable, or whether quick but careful planning can remove most of the sharp edges. Once again, the devil will be in the details, and no one envies the FCC with regard to the task it has before it. However, the chance for an optimal outcome will be maximized if all affected parties engage the FCC as it designs the process. In addition to hopefully producing a workable result for the FCC, broadcasters engaged in the process can ensure that the result is good not just for broadcasters in general, but for their particular stations.

For those interested in getting an advance view of what specifically is involved, Harry Jessell of TVNewsCheck recently interviewed us to discuss some of the pragmatic issues facing the FCC and the broadcast industry in navigating the spectrum auction landscape. The transcript of the interview can be found here. Those comments provide additional detail on the tasks facing the FCC, as well as how long the process will likely take.

While everyone impacted by the spectrum auction and repacking process faces many uncertainties as to its outcome, of this we can be certain: challenging times lay ahead.

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March 2012

TV, Class A TV, LPTV, and TV translator stations licensed to communities in Maryland, Virginia, West Virginia, and Washington DC must begin airing pre-filing license renewal announcements on April 1, 2012. License renewal applications for these stations are due by June 1, 2012.

Pre-Filing License Renewal Announcements

Stations in the video services that are licensed to communities in Maryland, Virginia, West Virginia, and Washington DC must file their license renewal applications by June 1, 2012.

Beginning two months prior that filing, full power TV, Class A TV, and LPTV stations capable of local origination must air four pre-filing renewal announcements alerting the public to the upcoming license renewal application filing. These stations must air the first pre-filing announcement on April 1, 2012. The remaining announcements must air on April 16, May 1, and May 16, for a total of four announcements. A sign board or slide showing the licensee’s address and the FCC’s Washington DC address must be displayed while the pre-filing announcements are broadcast.

For commercial stations, at least two of these four announcements must air between 6:00 pm and 11:00 pm. Locally-originating LPTV stations must broadcast these announcements as close to the above schedule as their operating schedule permits. Noncommercial stations must air the announcements at the same times as commercial stations; however, noncommercial stations need not air any announcements in a month in which the station does not operate. A noncommercial station that will not air some announcements because it is off the air must air the remaining announcements in the order listed above, i.e. the first two must air between 6:00 pm and 11:00 pm.

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