FCC Proposes LPTV and FM Repack Reimbursement Schedule

The Federal Communications Commission ("FCC") has invited comments on a "catalog" of categories and amounts it thinks are reasonable for reimbursement of expenses incurred by low power TV ("LPTV") stations as a result of involuntary channel changes imposed by the post-incentive auction repacking of the TV spectrum. Congress initially appropriated funds to reimburse costs incurred by only full power TV stations changing channels; the full power TV industry is currently going through the reimbursement process. Congress later added more money so that displaced LPTV and affected FM radio stations could also seek cost reimbursement, with FM stations eligible to claim reimbursement if they are forced temporarily or permanently to modify or to relocate their transmission facilities to accommodate repacked TV stations. We've previously discussed this portion of the repack reimbursement process here and here.

The catalog indicates costs estimated by the FCC for certain kinds of equipment and services it expects stations to incur during the repack. It was prepared by the same outside contractor that prepared a similar catalog of costs for full power TV and Class A stations. The catalog does not address eligibility for reimbursement, which is the subject of a separate proceeding. In general, to be eligible, an LPTV station: (1) must have been displaced by the repack, (2) must have filed an application for a new channel, (3) must have had its application granted by the FCC, and (4) must actually build facilities on its new channel. The FCC does not propose to pay for more than one channel change for LPTV stations, even though some stations will be forced off their existing channel before a permanent displacement channel is available and thus will have to move first to an interim channel and later to a final channel. Eligibility for an FM station hinges on the station having been forced: (1) to move to a new tower, (2) to relocate its antenna(s) on an existing tower, and/or (3) to operate with auxiliary or other temporary facilities during the time that a TV station is constructing new facilities on a shared tower.

While the proposed catalog is not the final word on amounts the FCC will reimburse, it is significant for several reasons. First, it indicates the types of expenses the FCC may be willing to reimburse. The list is comprehensive and includes both equipment and services, although we notice the FCC thinks that FM stations will incur HVAC costs, but LPTV stations will not. Second, the costs in the final catalog will serve only as benchmarks. Stations that actually incur higher costs will be able to claim them, though no stations will be able to recover costs beyond actual cash expenses they can prove they paid out; but stations seeking reimbursement above catalog limits will have their feet held more closely to the fire in terms of having to prove why they need to spend so much more than stations whose claims are within the catalog limits. Finally, the FCC will be able to pay out only the amount of money made available by Congress; so if total claims exceed available funds, the FCC will likely get even tougher during the review process and may ultimately reduce claims it does approve to less than 100 cents on the dollar.

The reimbursement claims experience for full power and Class A stations has not always been easy, as federal fraud laws apply to FCC processes, resulting in the FCC's acting very meticulously (sometimes to the point of frustrating claimants) in requiring complete and detailed documentation of incurred costs and of actual amounts paid to vendors. If you believe that you are eligible for reimbursement, you should review the catalog carefully and then keep all receipts and other documentation in detail for every dollar you hope to claim. You should also obtain written price quotations from vendors in advance of making purchases. Keeping good records from the outset will make life a lot easier when it comes time to file a claim.

Meanwhile, you should also review the FCC's catalog of expenses and consider filing comments with the FCC if you feel the FCC has underestimated the cost of necessary equipment and/ or services or omitted them entirely.

Comments will be due November 21, 2018, with replies due on December 6, 2018. We will be happy to help prepare comments and will also be ready to assist clients with future reimbursement claims.