Session Goals Understand the tight timing to implement TV repack - - PDF document

5/24/2016 1 The Post‐Spectrum‐Auction World for Public TV – Part Deux

An FCC and Legal Perspective on Planning Ahead for TV Repack and Post‐Auction Operations

Margaret L. Miller, Esq. Gray Miller Persh LLP (engineering slides courtesy of Joseph Davis)

• Understand the tight timing to implement TV repack

– its impact on your station and budgets – some of the supply chain challenges for TV repack

• Understand the proposed reimbursement process
• Understand potential action items for stations (now

and later)

Session Goals

• Auction

– Process ongoing now. Real auction action starts May 31, 2016. – Shhh…. Quiet Period in Effect – Some stations may be bidding, in auction, to change bands to High VHF Channel or Low VHF Channel or to Share Channels – End Date of Auction is Unknown

Basics of Auction and Repack

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• Repack

– Station not in auction (or unsuccessful in auction) may have to change to a new channel in the same band

• Coverage areas and service area are protected

– FCC to reimburse for “reasonable expenses” for involuntary channel changes

• Reasonable expenses
• Involuntary channel changes

Basics of Auction and Repack

From SI EPR “I ncentive Auction Design Conference” Feb 2013

Graphic or Chart should fit within this blue box

• Repacked to Channel 29 and below
• At 84 MHz Clearing Target, repack to Ch. 36 and below
• Some TV Stations in Wireless Band (?)
• Here’s the FCC’s graphic:

Band Plan at 126 MHz Clearing Target

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• 2012‐Present: Many (many) rulemaking

proceedings

– Pre‐auction process, auction design, opening bid prices, band plan, clearing target and final TV channel assignment process – Maximize “stays” – Minimize total new interference over 1% – Avoid channel changes for stations with high buildout costs

Timelines and Milestones

• Summer 2015 ‐‐ Baseline technical data

– Form 2100, Schedule 381 (Survey)

• Fall 2015 ‐‐ Final Catalog of Costs Adopted
• 2016 – Incentive Auction

– Reverse Auction starts May 31th – Forward Auction – Final Stage Rule (could go into 2017)

Timelines and Milestones

• t=0 Channel Reassignment Public

Notice

– Final TV Channel Assignments and Parameters Announced – Date of Release Unknown

• Likely no earlier than 3rd Q 2016
• Could be into 2017

– All Important Repack Dates Key Off of this Date

Timelines and Milestones

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• t + 3 months (i.e., 3 months after

Channel Reassignment Public Notice)

– Stations being repacked must file Construction Permit applications and submit estimated channel relocation costs. – Crunch time!

• 3 months to plan new facility and transition to new

channel

Timelines and Milestones

• After t + 3 months

– 36 months for “Broadcast Construction Period” begins – CPs are issued – FCC reviews cost estimates and issues “initial allocation” of funds – FCC sets construction deadlines for new channels

• Deadline will vary by region, complexity, other factors
• Some stations will have less than the full 36 month period

Timelines and Milestones

• t + 39 months (39 months after

Channel Reassignment Public Notice)

–Operations on pre‐auction channels ceases –6 month extension of construction deadline until request

• Subsequent extensions much stricter

Timelines and Milestones

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• Implications of t + 39 months

– Must go dark if cannot get off old channel – Interim operations will be necessary for many stations

• Temporary installation
• Reduced facilities
• Alternate site/Temporary channel

Timelines and Milestones Facility Planning:

Limited Opportunity to Pre‐Plan – 3 months

Graphic or Chart should fit within this blue box

1. Pre-planning (t = 0) 2. RF Engineering 3. Structural Engineering 4. Negotiate with tower owners 5. Permitting 6. Estimated Reimbursement Costs to FCC (negotiation?)

Facility Planning Process

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• After t = 3 months ------

7. Acquire equipment/manufacturing 8. Tower Work 9. Field Engineering

Facility Planning

• Transmitter
• Antenna
• Transmission line
• Tower Work

– Structural Analysis/Structural Work – Limited Number of Structural Engineers

Facility Planning – Expenses

• Depressed marketplace for equipment
• Severe impact on high‐power TV antenna

manufacturers and tower crews capable of working on tall and complicated towers

• Tower Crews:

– No more than 14 complex tower crews, current estimate is 5‐10; 30‐40 “regional” crews

Vendor and Service Provider Capacity

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• Structural Engineers: All firms at peak can do

total of 40 structural analyses per month

• Field Engineering (Transmitter installation &

modification): Now, est. 30 (was 100 through 2009)

• RF Consulting Engineers ‐‐ Est. 35, half of

which positioned to handle more than 5‐10 stations

Vendor and Service Provider Capacity

Limited Engineering Resources

• Not protected in Repack
• Expectations of Displacement
• No Reimbursement for Channel Change

Impact on TV Translators/LPTV/DRT

• FCC Mitigation

– Special filing window for displaced operating facilities

• opens after t = 3 months and DTV expansion/alternate

channel filing

• MX apps – settlement window, DRT priority, then auction

– Facilities in 600 MHz band may continue to operate until notified by new licensee (120 day notice); if on guard band must cease at t = 39 months

Impact on TV Translators/LPTV/DRT

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– Stations Involuntarily Repacked – Winning Full Power Bidders for Band (Channel) Changes – Expansion Opportunities – TV Translator (and LPTV) Displacement and Digital Buildout

• All will draw from the same manufacturer and

service provider resources

“Perfect Storm” of Challenges and Shortages

• Reimbursement goes to stations involuntarily

repacked

– Impact at Shared Sites – TV Stations not Changing Channels – FM Stations and other Tower Users

• Does lease/contract specify obligations?

Reimbursement for Eligible Expenses

– $1.75 Billion established by Congress – Reimburse broadcasters for channel relocation expenses – For non‐auction participants and unsuccessful auction participants, but only those who are required to change channels (i.e. “relocate”) – Successful auction participants are not eligible for reimbursement (neither are TV translator/LPTV stations)

Reimbursement Process – Overview TV Broadcaster Relocation Fund

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• Initial allocation of funds

– Public TV stations up to 90% of costs allocated in advance [Note the importance of good cost estimates!]

• Cost estimates due w/in 3 months after

Channel Reassignment Public Notice (t+3)

• ATSC 3.0 and Repack (or not)

Reimbursement Process ‐‐ Overview

• Estimate of costs on FCC Form, using Catalog
• f Eligible Expenses
• Only costs “reasonable to provide facilities

comparable to those that a b‐caster… had prior to the auction”

• Hard and soft expenses (more on that later)

Reimbursement Process – Overview

• f Cost Estimates
• Lowest cost equipment that most closely

replaces existing equipment

• No reimbursement for new features
• Reuse own equipment to extent possible; if

seek new equipment, must justify (technically)

• FCC encourages b‐casters to seek out used

equipment

Reimbursement Process – Overview

• f FCC Expectations

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• Stations may select applicable cost estimates

pre‐determined in the Catalog,

– or provide and justify and document own individualized estimate

• Stations must certify belief, in good faith,

– Reasonably incur all these costs – Will use money only for eligible expenses – Comply with all draw down procedures, maintain detailed records, file all required documentation

Preparing Cost Estimates

• Initial allocation ‐ based on FCC review of cost

forms

• Issued to stations in designated individual

accounts per FCC vendor payment system

• For PTV, initial allocation “up to” 90% of

estimated costs

• Funds available for draw down as expenses

incurred and as documentation is submitted and approved

Initial Allocation

• Waste & Fraud

– Progress reports required – Keep receipts & documentation 10 years – Audit, site visit, data validation by FCC or contractor during and following reimbursement period

• For transition concluding after t = 39 months,

submit final expense docs

– Can dispose of old equipment at will

Reimbursement: Some Important Points

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• Before or at end of 3 year reimbursement period
• Stations provide actual and remaining estimated

costs

• Additional funds allocated as necessary
• Prioritization scheme if there is a shortfall in the

fund – FCC’s Media Bureau decides

• If $$ left over in Station’s account, reverts to US

Treasury

True‐up

• This Form is your friend – submit for

– Info to establish account with FCC for payment purposes – Estimate of Eligible Relocation Costs – Actual cost documentation, as expenses incurred, so that reimbursements can be made – Total expenses occurred

TV Broadcaster Relocation Fund Reimbursement Form

• This Form (20 pages) available at:

http://transition.fcc.gov/Daily_Releases/Daily_B usiness/2015/db1030/DA‐15‐1238A2.pdf

• Instructions (17 pages) available at:

FCC Form 2100, Schedule 399 Instructions (2015).docx

TV Broadcaster Relocation Fund Reimbursement Form

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Learn to Love the Form

• Documentation is key
• Payments disbursed on rolling basis
• Stations update the actual cost section of the

Reimbursement Form each time they submit cost documentation for payment

• Multiple cost submissions
• FCC presently seeking contractor to administer

reimbursement

Learn to Love the Form

• Hard Costs

– Equipment replacement and installation – Equipment modification – Tower work

• Soft Costs

– Engineering fees (RF and structural consultants) – Health care facility notifications – Legal fees

Eligible Costs for Reimbursement

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• t = 0

– Channel Reassignment Public Notice. The fun begins!

• t + 3 months

– Submit first Reimbursement Form (used for initial allocation of 90%)

• t + 39 months (during construction on new

channel)

– Submit Reimbursement Forms (and invoices, etc.) for approval and draw down of reimbursement payments

Reimbursement – Timing Review

• t + ? months

– Submit Reimbursement Form for final accounting and true up

• t + 39 months

– Reimbursement period ends

Reimbursement – Timing Review

• Timing matters
• First Reimbursement Form is key – initial

allocation (90% of estimated costs) based on this

• Actual reimbursements based on actual expenses

incurred, documented and approved

• Keep very good records and documentation
• Budget for and consider how to handle cost‐
• verruns (reimbursable AND non‐reimbursable)

Reimbursement ‐ Key Takeaways

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• Review Form and Instructions
• Confirm/engage RF engineering consultant;

you need someone on board and ready for t=0 time

• Repack expenses incurred now are

reimbursable

– If (IF!) your station is repacked

Planning – For Right Now

• Consider a Project Manager for repack

– PM is a reimbursable cost – staff time not reimbursable

• Begin educating your procurement/purchasing

chain about timing and process to come

Planning – For Right Now

• Prepare for a busy time ahead

– At this point, best guess is busy time to kick off Fall 2016, at the earliest (?)

• Be ready to jump to (if needed) at t=0

– Everything keyed to Channel Reassignment Public Notice

• Budget planning needs to account for possible

repack, reimbursement program, cost

• verruns and delays

Planning – For Later

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Margaret L. Miller Gray Miller Persh LLP 202‐776‐2914 mmiller@graymillerpersh.com

Engineering Slides Courtesy of: Joseph M. Davis, P.E. Chesapeake RF Consultants, LLC Radiofrequency Consulting Engineers Digital Television and Radio (703) 650‐9600 www.RF‐consultants.com

Comments? Questions? Thank You!