As the FCC begins to review broadcasters’ cost estimates to change channels as television spectrum is repacked, some stations are worried about how the Commission will interpret what is a “reasonable” reimbursable expense. The deadline to file those costs estimates was yesterday. It’s possible the FCC would release a preliminary aggregate cost figure this week, with the caveat that it is subject to change, a spokesman told Inside Towers.
Station engineers as well as consultants who Inside Towers spoke with at the local Society of Broadcast Engineers Chapter 37 meeting the previous night, were busy putting the final touches on their numbers; they agreed with NAB that the costs will greatly exceed the $1.75 billion Congress directed the FCC to set aside for reimbursement.
Baltimore-based Sinclair Broadcasting met with advisors to FCC Chairman Ajit Pai and Commissioner Michael O’Rielly last week to express concern. “There remains significant disagreement regarding the reimbursement eligibility of transmitter ‘headroom,’ which exposes many station groups to millions of dollars in financial risk,” writes Sinclair Broadcast Group SVP Rebecca Hanson in an FCC filing.
“Headroom” is reserved excess transmission capacity; it’s commonly built into a facility design to allow the station to upgrade power easily at some point in the future. Hanson points out the agency is tasked with reimbursing costs, “to provide facilities comparable to those that a broadcaster…had prior to the auction.”
Broadcasters have been investing considerable amounts of money into transmitter headroom for decades so it should be considered an essential and reimbursable element of a “comparable” facility for stations that have already invested in headroom for their current transmitters, writes Hanson. But she says the agency “informally” signaled in its June 30 FAQ, headroom won’t be reimbursable. “We are concerned that the FCC may be taking this approach to artificially reduce the cost of the repack” to stay within the allotted amount.
Given speculation that the fund won’t be enough and the Commission will need to go back to Congress to ask for more money, “The FCC should honor its commitment to allow broadcasters to rebuild their facilities consistent with current practice,” writes Hanson. Making the assumption that headroom is not reimbursable now “will foreclose the possibility” of future reimbursement if the fund is expanded in the future.
July 13, 2017