Post-Incentive Auction Update for TV Stations

July was a whirlwind month for TV stations. Nearly 1,000 stations filed for their assigned post-auction repack channel by July 12, 2017, with most of those also filing a Form 399 cost estimate by that same date to establish a baseline amount that it will cost the government to repack stations into channels 2-36.

The initial total exceeded the $1.75 billion reimbursement fund cap by about $400 million, which immediately brought calls from broadcasters and the FCC for Congressional authorization for more reimbursement funds. Legislation has been filed seeking an additional $1 billion authorization to address not only full power and Class A station repacked channel buildouts, but also funds for FM stations affected by TV channel buildouts, and for reimbursement of displaced LPTV stations. It’s called the Viewer Protection Act of 2017, and was introduced July 20^th. And it even includes authority for the FCC to modify the repack transition schedule.

The FCC’s License Management System strained to function in the final days before the July 12, 2017 deadline, with several hundred stations being blocked out as the system struggled to remain available for filings, reportedly for lack of sufficient memory. The FCC allowed late filings, and the last Form 399 was filed July 21^st.

Good news followed for auction winners, with the FCC paying out the full amount of their winning bids on July 21, 2017. A number of those stations will have to use some of those funds to construct new facilities on a newly-assigned VHF channels. Others will need to pay another TV station to channel share in order to continue operating as a TV station. A final group will simply cease station operations.

So, what’s next? Stations filing Form 399 have already begun receiving emails requesting additional documentation or amendments, with very short 5 business day deadlines. Stations should watch their email (and spam filters) for such notices, as the penalty for not responding is an automatic downward adjustment to a station’s allocated amount.

In coming weeks, the FCC will announce those initial allocation amounts for each repacked station entitled to reimbursement, as well as reimbursement procedure clarifications. Stations will not be able to access those funds until they have filed Form 1876 to set up a bank account that will receive reimbursement funds. Have you filed yours yet?

Stations with repack or band-changing construction permits must pay close attention to details. A transition progress update summarizing actions stations are taking toward construction must be filed each calendar quarter, starting with the third quarter of this year (July, August, September). For that quarter, updates will be due no later than October 10, 2017.

And of course, we should keep a close eye on the pending legislation, as its adoption could impact many aspects of the transition.