FCC to Dispense More Repack Money

The FCC will issue an additional $742 million to reimburse television stations for expenses related to their channel moves, as the TV spectrum is repacked. With this extra money, eligible stations have access to a total of $1.742 billion, according to the FCC’s Incentive Auction Task Force and the Media Bureau. The new money represents approximately 92.5 percent of stations currently verified cost estimates.

The money is for eligible full power and Class A broadcasters and multichannel video programming distributors (MVPDs). The FCC stressed that individual invoices that are approved for payment are being paid in full (i.e. 100 percent), up to the total amount of the station or MVPD’s allocation.

To prevent fraud and waste, the agency is doling out repack reimbursement funds in batches. When the FCC made its initial $1.75 billion allocation last October, the estimated demand was actually $1.86 billion and both the FCC and NAB believed the total costs would rise to about $3 billion, a situation yesterday the FCC said “imposed significant fund management challenges.” When the bureau made its initial allocation, the amount represented 52 percent of commercial and 62 percent of non-commercial station verified expenses. 

The FCC said this March, it would allocate more money in about four to six weeks. A number of station owners have reached drawdown levels, indicating that they will soon reach, or even exceed, their remaining funding. Others have revised their cost estimates with more detailed information as construction planning and execution has proceeded, said the FCC. All of this activity changed the total reimbursement demand. The total verified and unverified cost estimates submitted by eligible entities as of March 7, 2018, was approximately $1.95 billion.

Inside Towers reported Congress recently passed language approving an additional $600 million to supplement the fund this year and $400 million for 2019. That allowed the agency to make a higher new fund allocation now.

NAB was quick to respond. “NAB welcomes the FCC making significant additional repack reimbursement funding available following passage of the recent appropriations legislation and Ray Baum’s Act authorizing additional funding if needed,” said NAB EVP Communications Dennis Wharton. “We look forward to continuing to work productively with the Commission to ensure that broadcasters are fully reimbursed and that stations are not forced to reduce service due to circumstances outside their control.”

But the news from the Commission was not all sunshine for broadcasters. The Commission also reminded stations reassigned to new channels, they need to “be mindful” of their transition phase deadlines, and plan for and initiate the various stages of their construction projects in a timely manner to meet them. Although the Ray Baum’s Act provides a process by which the agency can give a station more time to reassess its construction expenses, “the bureau will view unfavorably any application/request for modifications of the transition schedule that would likely delay or disrupt the transition.”

April 17, 2018

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