UPDATE & RANT
At the end of last week, the FCC Media Bureau officially suspended all LP, LD, and TV translator analog-to-digital and new digital construction permits, until "pending final action in the rule making proceeding in MB Docket No. 03-185." The FCC also made clear, that all Class-A facilities, need to complete their scheduled conversion to digital by September 1, 2015, or else go dark while they do.
While these two issues seem simply enough, there is a lot to consider, and which needs to be discussed.
THE CLASS-A PARADOX
When the original Incentive Auction NPRM was issued, way back in September of 2012 (almost 1000 days ago), the FCC determined that there could be as many as 100 Class-A licensees which might be ineligible for the auction. Our Coalition has asked on numerous occasions for the list of these potentially ineligible licensees. This issue continued on with the passing of the Incentive Auction Report and Order in June 2014, and is part of the Coalition's Petition for Reconsideration. Why is this important?
In the Public Notice issued last week, the FCC now says that any analog Class-A, which do not convert to digital status by September 2015, will need to go dark until they complete the conversion. We ask, why are potentially as many as 100 auction ineligible Class-A's forced to both convert to digital, and forced to continue to maintain the Class-A rules, if indeed they are not to be afforded the protections in the repack as the auction eligible stations?
So, it seems that the remaining analog Class-A licensees, which are not auction eligible, must still comply with the Class-A rules to convert to digital, or go dark until they are digital. Even though they will not receive any protection or preference in the repack.
We urge the FCC to make clear the following:
1) Which Class-A's, either analog or digital, are not eligible for the auction simply because they did not meet the Feb. 2012 eligibility date?
2) Will any Class-A, which has completed its' conversion to digital prior to the auction, but was deemed not eligible for the auction because of the Feb. 2102 eligibility date, have any protection or priority in the repack?
THE LPTV CONSTRUCTION PERMIT DEADLINE UNKNOWNS
A key element of the Public Notice issued last week is that the decision for when the new LPTV construction permit deadline is will be announced as part of the LPTV Report and Order later this summer. So between now and then we still do not know if the new deadline will be before the auction, during the 39-month repacking, or after the repacking period. We also do not know if those permits which had already submitted 3rd extension requests, a Commissioner-level decision, will be treated the same as others. We also do not know if all of the permits will be staggered according to their original dates or harmonized to one date. There are additional unknowns which get even more complicated. But what we do know is that no one is going to be forced to "double-build" facilities, except it seems those auction ineligible Class-A's.
MAY AN LPTV STILL BUILD OUT THEIR DIGITAL FACILITY?
The answer is yes, nothing in the Public Notice issued last week prevents any LPTV from building out based on their original digital permit. But why would anyone want to do that? There is actually a good reason for some to do this. Those which have a digital construction permit for channels 50-38, which is the new national band auctioned for mobile broadband, and possibly channels 36-27, which could be used in some markets. You may stay on-channel until 120-days before the winning mobile broadband provider either starts testing or is ready to deliver their service. For most this could be many years from now, based on how slowly the implementation has been in the 700-MHz band. Let's look at the timing a little closer.
1) Assuming the auction happens a year from now, and six months after that (later fall 2016) you get a new channel assignment and new construction permit, and the conventional time frame given has been 3 years. That would literally put the new channel build deadline about 42 months post-auction. Since the non-auctioned primary and Class-A's have a full 39 months post auction to use their relocation funding, this could mean a mad dash the last year of the repack for 1000's of LPTV and TV translators to rebuild. So by building now, your digital facility from 50-38 for sure, and 36-27 to a lesser degree, you can buy yourself a few years of being digital and staying on the channel you have built. Of course, any delays in the auction itself buys you more time to be on-channel and make back your investment or profits.
2) A second scenario if you are displaced by a moving full power or Class-A which have not entered the auction, or did not win an auction bid. You then may have to move within a very short period of time, since they may want to relocate quickly. So in this case, a year to the auction, and possibly as soon as a year to three years until you have to move. Again, if you are displaced, you will be able to apply for a new channel from a pool of those that are available.
3) In this limited example, you may already have a construction permit for a channel which no primary or Class-A displaces you from, and you can then build out whenever you want based on the to-be-announced new deadline. Or you may have an already built digital facility which is not displaced and you get to keep on broadcasting as is.
4) After the auction, the FCC is planning on running what they call the "feasibility checker" to see how many vacant channels there are in any market/city of license, and will then let LPTV and TV translators know which channels these are. Then, those stations which are displaced as described above, will then get to file applications for these channels. If there are 4 open channels and 8 LPTV and TV translators in the market, then they will be competing for the channels in what are called the "MX" rules, or mutual displacement applications. Currently these rules are vague and have not been used in such an extreme situation as the Incentive Auction. What could happen is a hugely unfair process of those that have the most money get to have the most channels. You could have had your license for 20 years, built a family legacy business, and someone else could come along and outbid you for the remaining available channel. Does not sound fair to us and we are working on understanding how this happening. More on that later this week.
So, last week's Public Notice told us something about when we may know more, but as you have read, there are many unknowns, far more than the knowns.