Media Bureau Adopts Post-Auction Policies and Procedures for Stations Transitioning to New Channels Following the Broadcast Incentive Auction

On January 27, 2017, the FCC's Media Bureau released two Public Notices announcing: (1) a methodology for establishing construction deadlines for post-incentive auction facilities; and (2) instructions and proposed deadlines for filing applications related to the post-incentive auction broadcast transition. Although these public notices provided transitioning stations with some much-needed clarity regarding the post-auction process, the Bureau's attempt to provide broadcasters with a highly sought-after explanation regarding the boundaries of the transition's prohibited communications rule appears to have been less successful.

Post-Auction Construction Methodologies

In this Public Notice, the Media Bureau adopted a methodology to establish construction deadlines for full power and Class A television stations transition to new channels following the incentive auction. The methodology adopted by the Bureau was largely based on the transition plan proposed in the Transition Scheduling Proposal Public Notice - including the usage of the Phase Assignment Tool, and the Phase Scheduling Tool.

Phase Assignment Tool: The Bureau stated that once the forward auction satisfies the final stage rule and the final channel assignments are determined, the Bureau would use the Phase Assignment Tool to assign a transition phase to each transitioning channel. The tool will rely upon eight "Constraints" and four "Objectives" to minimize problems, and ensure that the 600 MHz band is cleared as quickly as possible.

Furthermore, the Bureau made two alterations to the Constraints proposed in the Transition Scheduling Proposal Public Notice. First, the Bureau neglected to adopt as a Constraint a prohibition on temporary channel assignments. Instead, the Bureau stated that it would allow stations to voluntarily seek the use of a temporary channel at any time during its assigned phase transition period. Second, the Bureau adopted the NAB's suggestion that, as an alternative to capping aggregate temporary interference levels at 5%, the Bureau will instead attempt to find alternative phase assignments for stations predicted to receive greater than 5% temporary aggregate interference.

Phase Scheduling Tool: Additionally, the Bureau adopted several time and resource estimates for the Phase Scheduling Tool, enabling the Bureau to estimate the average amount of weeks it will take all stations in a phase to complete their transition. These variables would be dispersed across two stages as follows:

• Pre-Construction Stage: These categories cover the time and resource estimates for the work stations need to complete prior to constructing post-auction facilities on their towers, including: (1) the time required for antenna equipment to be ordered, manufactured, and delivered; and (2) the time required for all other planning and administration activities necessary to prepare for construction.
• Construction Stage: (1) the time to complete all general facets of construction (i.e., "Construction Related Work"); and (2) the time required by tower crews to install equipment on towers. The Bureau however noted that these time and resource estimates would not account for delays created by weather.

These variables will enable the Bureau to simulate how long it will take all stations in each phase to obtain access to limited resources, and to complete their transitions. The Bureau will run the Phase Scheduling Tool 100 times to generate the average number of weeks required for phase completion, which in turn will enable it to project the completion dates for each phase.

Finally, in the Public Notice, the Bureau attempted to provide transitioning broadcasters with some much-need clarification of the scope of the prohibited communications rule - which prohibits broadcasters and forward auction applicants from communicating information regarding an applicant's bids and bidding strategies to other covered parties. Specifically, the Bureau stated that broadcasters may communicate with third parties not covered by the rule (e.g., consulting engineers, equipment vendors, and counsel) - even if doing so discloses bids or bidding strategies - so long as the third party does not convey such information to another covered party.

However, the Bureau's clarification did not provide any safeguards for broadcasters communicating with third parties ensuring that third parties did not actually relay prohibited information to other broadcasters and entities covered by the rule. The Public Notice also left open the question of when broadcasters covered by the rule may be able to begin communicating with each other now that all reverse auction bidding has ended. Accordingly, much uncertainty remains as to the degree of which third party communications are permitted under the prohibited communications rule.

Post-Incentive Auction Applications

In the second Public Notice, the Bureau announced instructions and projected deadlines for filing applications related to the post-auction facilities. The Bureau stated that transitioning stations will have 90 days from the Closing and Reassignment Public Notice release date to file construction permit applications for operations on post-auction channels - with subsequent opportunities to file construction permit applications for alternate channels or expanded facilities on new channels. The Bureau provided information and application instructions depending on several station categories, including: (1) Reassigned Stations; (2) Band Changing Stations; (3) Non-Reassigned Stations (with greater than 1% population loss); (4) Displaced Class A Stations; (5) License Relinquishment Stations; (6) Channel Sharing Stations; and (7) Multichannel Video Programming Distributors ("MVPDs").

The Bureau further noted that all transitioning stations are required to complete construction of post-auction facilities and notify viewers of impending channel moves by the end of their transition period. Once stations become operational on their new channels, they must file a license application to cover their new post-auction facilities. However, the Bureau also stated that applications for extensions of time, requests for Special Temporary Authority ("STAs"), and requests for waivers of deadlines to discontinue pre-auction operations would be granted on a case-by-case basis - and that applications/requests unlikely to delay or disrupt the transition will be viewed more favorably.

Finally, the Bureau outlined in the Public Notice the post-auction reimbursement process for transition costs incurred by reassigned stations and MVPDs. The Bureau clarified that involuntarily reassigned stations and MVPDs that incur costs for carrying reassigned stations are eligible to receive reimbursement for reasonable costs or may request a waiver of the Commission's service rules permitting the station to provide non-broadcast television services. Such waivers must be filed by eligible stations within 30 days of the release of the Closing and Reassignment Public Notice. The Public Notice also reaffirmed that costs for third party stations affected by transitioning stations (e.g., collocated FM stations) are eligible for reimbursement if a contract existed as of June 2014.

While the two public notices provide a comprehensive framework for stations transitioning to post-auction facilities, the Media Bureau advised stations involved in the Incentive Auction to stay tuned for any updates that may affect their transition requirements and obligations as a result of obstacles encountered during the progression of the post-auction transition period.