SPECIAL EDITION
MONDAY, OCTOBER 6, 2014

LPTV & THE SPECTRUM AUCTION
Updates from Congress, the FCC, and the Courts
KEY HOUSE COMMITTEE MEMBERS MAKE A BI-PARTISAN ASK FOR AN LPTV GAO STUDY ON THE IMPACTS OF THE AUCTION
Congresswoman Eshoo (D) of California (Silicon Valley), and Congressman Barton (R) of Texas, both key members of the House Subcommittee for Communications and Technology, jointly crafted a letter to the General Accountability Office (GAO) asking it to:

"...study the impacts of the incentive spectrum auction on LPTV stations and TV Translator stations, as well as their viewers."

As you read this long report I want you to keep in mind that this letter and request by House Subcommittee leaders was a "bi-partisan request", and one that had "substantial input" from our Coalition, as well as others in the industry.  This is how Congress is suppose to work, with and for everyone. Contrast what you read below with the horrible bill submitted this summer by just one side of the subcommittee which was done in secret and had very little if any LPTV industry wide input.  

The Coalition gives the members of the House and staff who crafted this GAO Study request an "A+" in timing, clarity of the request, and the deliverables asked for.  The only concern we have is the last GAO LPTV study took 11 months to complete...we need this study done much faster.
  
House Letter SpecificsCoalition Commentary

1)  Evaluate the impact of the incentive auction for each of the two potential scenarios for repurposing broadcast spectrum at 84 MHz and 
126 MHz.  
What is interesting with this is that they want to study the full 126-MHz of spectrum grab. That is a full 21 channels at 6-MHz each, bringing it all the way down to 31. Most would now say that the 84-MHz number is most likely (51-38).  I actually like the 126-MHz number in that if LPTV were allowed into the auction that much spectrum for sure would be cleared. Hint, let LPTV become auction-eligible and all of the spectrum the Google-plex and CTIA wants will be available, assuming of course there are buyers.

 

2)  Within each of the two categoriesplease provide the following information: The total number of LPTV stations that provide original programming or broadcast local news and information, especially those serving racial and ethnic minority communities, including the total number of TV translator stations that rebroadcast local news and information, and the programming of a full-power TV broadcast station.  

It is very interesting the way this is phrased using the "provide original programming" language.  This could mean that a paid channel lease deal (time brokerage) could say they are doing this since they air original programming from a national network. But it also could be a pointed reference to the fact that many LPTV are network affiliates and do not do local original programming.  Thing is that it is the same for most primary stations except for local news and weather.  But this phrasing could just be asking for the difference between what an LD station would be doing, airing original programming, or what a TV translator would do, airing a local station which is in the same market but too far away to be seen.  Next they want to know about the racial and ethnic minority communities which are being served under both of these scenarios.  Fair enough, but why?  Congress may not like the answer to this question, as it could easily become the reason for stopping or altering the auction. And it could also be used to gain must-carry status, so let's see what the GAO comes up.

 

3)  A projection of the number of LPTV stations and TV translator stations listed under both scenarios that may lose either their current input or output channel as a result of the forward auction.  

This is going to difficult for the GAO to figure out exactly since it all depends on what happens in the auction itself. But it is easy to figure out if they have the correct framework to look at the problem.  We will attempt to provide to them some data points we have researched.

 

4)  A projection of the number of such LPTV stations and TV translator stations that will subsequently be able to locate and operate on replacement channels after the auction, together with an aggregate estimate of the costs of relocation, including new 
equipment, legal and engineering services, and facility construction.  
Now this is getting really interesting.  The channels part will be easy and based on the assumptions they made in the previous question.  But the really interesting part is the detailing of the projected expenses.  These categories are similar to what the auction relocation funding is allocated for.  We think the 126-MHz clearing number will definitely bring this estimate to the $1 billion+ aggregate cost.

5)  A projection of the number of such LPTV stations and TV translator stations that will be unable to locate to or operate on replacement channels after the auction.

While we are all waiting to see the final rules for LPTV we do know that displaced stations may move into the UHF or VHF, may change City-of-License, and we are advocating for adjacent-DMA changes if needed.  These options do not mean that the same audience will be able to be reached, and for many stations that will be a real pain.

 

6)  projection of the number of viewers that will lose over-the-air access to at least one such local LPTV station that provide local news and information, especially to underserved communities of interest.

Drilling down to the viewer-level is very important and will be eye-opening for all parties to the auction process.  The pillars of the Communications Act are in play with how the answer to this question is figured out.  But do notice that the concern in the question is about "local news and info".  So a station which only airs distant networks and has no local content will not be studied in this question?  Will a national Vietnamese channel which will lose coverage in major market-A not be counted because they only offered a national-level discussion of the news?  LPTV have no local programming requirements unlike Class-A's, so asking this question this way one has to be careful of the answer that is really wanted. 

 

7)  A projection of the number of viewers that will lose over-the-air access via such TV translator stations to at least one of the signals of the regional affiliates of the major commercial or noncommercial educational television broadcast networks.

Assuming the technical assumptions are identified, this should be a fairly straight forward question to answer.  As with many of the above questions, it will all depend on the actual auction results in each DMA.

 

8)  Recommendations to the FCC and Congress on ways to remedy adverse 
impacts of the auction on LPTV stations and TV translator stations, and most importantly, their viewers.

This is of course the most important part of the GAO Study, the recommendations to solve the identified problems and harm.  But the LPTV industry needs to carefully watch this, as what is best for the viewers may not be what is best for the businesses providing the service to them.  A balance is needed here so that the stations, the networks, the viewers, the government, and the supporting industries are all taken into account in any proposed remedy.  During the DTV transition the TV translators and the noncom's got funding, but most LPTV did not.


Again, the request is excellent, and hats off to all which provided thoughts and actions to make it happen.  I will be the first here to make a public apology for calling out the House Subcommittee members when the bill this summer was being proposed.  While the bill sucked big time, and as written could have totally given up the last defense LPTV had in the FCC process, the resulting firestorm around it has definitely changed the dynamic.  There has also been a lot of activity behind the scenes in the Senate about this issue, but the House is better set up to make the GAO request, so thanks once again.  Work in a bi-partisan manner, and keep the process open for discussion, and we all win. 

 

Most of you know that this spring and summer, while others were trying unsuccessfully to pass any kind of LPTV bill they could, the Coalition chose a different model and heavily lobbied both the House and Senate to make an ask of the GAO to conduct a study on the impacts of the auction on LPTV. The reason we did this was because after the initial DTV transition, but before the auction legislation, a similar type of study was done by the GAO which was the basis of what Congress used to decide to keep LPTV and TV Translator stations out of the auction, pay for their own displacement moves, and be secondary for ALL primary services.


But when we read the 2011 study (GAO)-11-790 we realized that both Congress and the FCC have ignored many of recommendations made in the study, and do not factor in the key data which the GAO provided when the Incentive Spectrum Auction Act was deliberated and passed.  So we wanted Congress to once again ask the GAO to study the impacts on LPTV stations and TV Translators, as well as our viewers.  The 2011 study, which the GAO describes as a "performance audit", took from October 2010 to September 2011 to conduct.  We certainly do not have 11 months to wait for this new study, as that would put us right into the anticipated auction process without any time to adjust or make course corrections.

But this study will give the next Congress, the 114th, the basis it will need to craft legislation to help LPTV and TV translators deal with the impacts of from the auction and subsequent displacements and repacking.

The GAO findings and recommendations of the 2011 study are eye-opening to say the least.  If both Congress and the FCC had accepted and acted on them, LPTV and TV Translators could be in a much much better position than it now finds itself.

The FCC has NOT worked towards fixing many of the problems identified in the 2011 study (GAO)-11-790, and as such LPTV is not only facing problems with the transition to digital, the auction, the displacements, but also with structural information and data needs.

When you read the 2011 study it reports that the FCC asked Congress for an additional Class-A window to be opened, but that it has been Congress which has not wanted to do it.  A very interesting lesson for us all in that.  It will take all parties, from all perspectives, and branches of government, to make solutions and accommodations for LPTV owners, our supporting industry partners, and our viewers, to make the incentive spectrum auction, and our displacements work. 
FCC RELEASES AUCTION VALUATIONS FOR CLASS-A'S IN EACH MARKET
Here is the official presentation for the FCC by Greenhill and related press
Class-A values will range from less than $5 million to over $360 million per license!  Can you believe that?  Congress wrote a bill and the FCC has built an auction which pays these amounts for a Class-A license, which has public interest obligations, but is then going to literally take LPTV spectrum for free and then make us pay for the displacement move!  Only the courts can stop this process, unless the 114t Congress next year steps in.
BROADCASTERS GO TO THE COURT OF APPEALS
NAB made the trek to the courts, then Sinclair.  Soon there were interveners on the government side.  Rumor has it a new case is about to be filed...more when we can say.... 
JOIN THE COALITION 
Okay LPTV licensees, it is time to join our effort. Join today We got your back, now help the effort!  Any Class-A member expecting a windfall please make out a check today, better still, use our Paypal system.