The LPTV Insurgency Begins....
Friday - 11/21/14

Just over 1000 days ago the 112th Congress passed the Incentive Auction enabling legislation.  It did so with bad data supplied to it by the FCC.  And it passed the legislation without a full understanding of what the Act implied, nor having studied the impacts on the LPTV industry.

It is easy to believe that they deliberately attempted to do a Kelo-type taking from us, and to force the most diverse, local, and small business part of the television industry into financial ruin, just because they thought they could. The FCC was a partner in this crime by not standing up for the very industry it was in charge of regulating in support of the Communications Act, and for the public benefit.  

A few facts which need airing, now some 1000 days later...

1.  The 2010 Broadcast Ownership Report, which was supplied by the FCC to Congress for use in its' decision-making, was purposely rigged to show a significantly lower participation of minorities, women, and civic ownership. The Video Division decided not to study TV translators, and a significant number of LPTV owners who did not complete the FCC surveys were never followed up with to survey their ownership composition.  This same pattern of bad data acquisition was again used against LPTV in the 2014 Broadcast Ownership Reports.  What this means is that a pattern of animus towards LPTV can be shown.  The FCC will say they were just following the rules, but they never attempted to fix them to assist  LPTV.

2.   Two, now sitting FCC Commissioners, were then senior Committee staff, one in the House, and another in the Senate.
Neither of them chose to insert into the Committee discussions the realities of the LPTV Right of Displacement. We doubt they even read the law and knew about it.  This has now led to a major problem for the Google-plex and unlicensed spectrum advocates.  When LPTV gets displaced, a minimum of 2,650 built stations and permits from channel 51-38 nationwide (the 84-MHz plan), and another potential 2,000 from 36-32 (the 126-MHz plan) nationwide, for a total of at least 4,650 stations and permits, will have the right to go find a new channel, somewhere.  This is current law, and the Spectrum Auction Act enshrines current 2012 LPTV rights.  What this all means is that the highly promoted "$100 Billion+ annual unlicensed spectrum economy" is not going to have much if any TV White Space or unlicensed spectrum to use in the new TV core.  So now they are trying within the Unlicensed Spectrum NPRM to do yet another Kelo-like taking from LPTV for a huge guard-band, and a guaranteed channel or more in each TV DMA.  So they are either really smart, or really on.

3.   These same two now sitting FCC Commissioners, while they were staff in Congress, did not recommend that the CBO score the enabling legislation to see if by including LPTV as auction eligible, would it generate more revenues for the government.  And nor did they recommend that the impacts on LPTV be studied.  One of these Commissioners, after being appointed to the Commission, actually testified to the House this last year, , that when the Act was being voted on, that it was known that the LPTV and unlicensed issues would have to be revisited in the future (like now).  It took over a year of intense lobbying and industry pressure from the LPTV community to get the House to ask for an impact analysis from the GAO.  But what still needs to happen is a re-scoring by the CBO.

4.   When the 2012 Auction NPRM came out, the FCC specifically says, that while Congress excluded LPTV and TV translators from becoming auction eligible, they, the FCC, did have the authority to do so in order for the auction to be a success.  However, the FCC said that LPTV in the auction would not help the auction to be successful.  They again repeated this same argument in the June 2014 Report and Order.  When pressed about whether they had ever conducted an economic analysis with LPTV in and out of the auction to back up their decision, it was repeatedly ignored.  Finally when confronted in an ex parte Task Force meeting, it was revealed that no economic study had ever been done, and the decision making to exclude LPTV was based on a legal basis and not economic facts.  The FCC will soon see that the decision to ignore their responsibility to base their decision-making on facts will come back to bite them in their collective rear-ends.  For all of the legal minds we pay for to work at the FCC, they did not feel it necessary to adhere to the Chamber of Commerce vs the SEC case.  Read it and weep.  The FCC may try to say it does not apply to them, as they did with the Unfunded Mandates Regulatory Act argument we made, but they better watch out.

5.   The LPTV and TV translator industry has been fighting these past 1000 days for displacement relocation funding, participation in the auction, flexible-use rights using the Digital Data Services Act, the opening of a new Class-A window, and the aforementioned GAO impact study.  However, we are now going to be fighting for the already incurred and on-going damages which have and continue to accrue as a result of the FCC not properly performing its mission.  This "class-action" will reach into the billions.  How you say?  The FCC's very own Greenhill Book is how.  Did you know that according to this authorized FCC auction promotional study, that the 15,900-MHz of spectrum which LPTV will have taken from it from channels 51-38, displacing some 2,650 stations and permits, will be 90% of the spectrum used for that part of the auction?  And that this spectrum, according to the FCC-promoted Greenhill Book is worth some $27 Billion, which will be a full 60% of the auction proceeds if the full 126-MHz is sold? So what are the collective LPTV damages?  Could it be in the billions?  And did you know that of the 475 or so Class-A licenses, that only 375 or so of them are action eligible?  And that if they all sell according to the Greenhill Book, that they will reap as much as $5 Billion!  We ask, why do about 4% of LPTV licensed get $5 Billion and the 96% of the rest of us get nothing but the obligation to pay for our own displacement moves?  So our insurgency is now all about that $27 Billion our licensed and permitted spectrum is worth.  We will work with the GAO to quantify the impacts to our industry, but we will go to the Courts to get our taste of that $27 Billion pie.

Here are a couple of our recent ex parte filings into the Incentive Auction proceedings...

This filing includes a lot of the analyses described above with more details, the GAO study outline, our meeting with Commissioner Clyburn's staff, and most importantly, the numerous legal actions the LPTV industry is in the process of researching and filing.  We can tell you this, it is the most hated couple of pages on the 8th floor at the FCC.

This is a supplement to our Petition for Reconsideration which goes into detail how the Media Bureau and merger teams do not think it is relevant to study how the merger partners treat LPTV related to must-carry, leased access, and retransmission contracts.  WTF?  Is LPTV not concerned about how the merger partners are currently and could treat them?  Are we not a statutory participant in their behavior?  To make matters even more animus, the Media Bureau says that it does not have the regulatory authority to ask for discovery from the MVPD in the incentive auction rule making, even though they specifically ask the LPTV industry to comment on how MVPD can be part of the post auction lifeline for the networks which air on LPTV.  The Courts again will not like the reasoning of the FCC.  But even before the courts, it may be Congress which steps into this issue, and then all hell will break lose...

and now for some industry news...

TV Technology editor Deborah McAdams takes us behind the FCC's incentive auction curtain and does a deep dive into a world of fantasy and illusion.  A must-read and very well written from her own perspective as a journalist covering this issue.

Yet another well thought out article from TV Technology.  This one goes into depth on the 50+ city roadshow the Incentive Auction Task Force is planning on doing all across the country to drum up support for the auction.  It plans on using the Greenhill Book and the huge valuations it has come up with to encourage auction eligible broadcasters to participate in the auction.  A really good summary from Wells Fago Securities spectrum expert Marci Ryvicker is part of this article.  But here is the kicker folks...according to current regulations, as we have reported before, "the Commission may not base a finding of public interest, convenience, and necessity on the expectation of Federal revenues from the use of a system of competitive bidding...", and they should not be out promoting the auction.  Heck, maybe we will have LPTV licensees and viewers show up at these events and raise a ruckus!  But before then maybe we will enjoin the FCC from even having the road show.  LPTV has no reason to play nice at all...and we may as well let the courts decide what is for lunch today.

The Democrats in the House Energy and Communications Committee are losing retiring Congressman Henry Waxman.  And Subcommittee Ranking member Eshoo, who represents Silicon Valley, wanted the full Committee position.  But she lost to a more senior ranking member Frank Pallone of New Jersey.  His focus has been more on medical issues than telecom, but we think he will give LPTV a fair hearing on our issues.  And we are glad Congresswoman Eshoo is still in her position in the Subcommittee.  While she has been a fierce advocate for the unlicensed spectrum users, and sometime this has been against our LPTV interests, we believe that she now understands that what is good for LPTV can be essential for how the unlicensed economy, which her District needs, can be mutually beneficial.  We are committed to helping her so that she can help us.

As most of you know I have been a big time vocal critic of how NAB has and is treating its little cousins LPTV.  But in a piece this week in TV News Check, NAB spokesperson Dennis Wharton takes on those who are now trying to say that broadcasting is no longer relevant nor local.  I almost want to pay NAB for an Associate Membership, and heck, if Dennis would write a piece about LPTV I would not care that NAB would not let me have a vote! (But isn't it time for NAB to have a low-cost LPTV membership fee, and our own LPTV Council, and be part of the broadcasting family? We have 60,000 MHz of spectrum they will need for 3.0, so let's make 2015 the year when NAB gives LPTV a big wet kiss!).  Please do read this excellent rebuttal and defense of our big cousins, and us, and a big thanks to TV Newscheck for giving NAB the space to make the case.

The non-com PBS affiliates and their underlying station licensees are doing a lot of thinking about how and if to participate in the auction, assuming it ever happens. But with the second delay in the past year, the non-coms have some time now to evaluate what to do, or not to do.  Check out this behind the scenes look into their process, with long time non-com executive John Lawson.

There will be a lot of changes coming soon to the LPTV industry, and we are excited about the possibilities.  But we need your participation and support now so that we can keep active in all of the various Proceedings, Rulemakings, research, and events.  Maybe you might even want to help protest at the FCC roadshow next year!
Join Us Today!  

Mike Gravino, Director
LPTV Spectrum Rights Coalition