FCC Frees up $742 Million More for Post-Incentive Auction Repack
Original Article by John Eggerton
As promised, the FCC has released the second tranche of post-incentive auction repack funding, which is almost all of the original money allocated by Congress.
It is allocating an additional $742 million (or 92.5% of total costs), with a tad left over for ($8 million), eventually, for “trueing up” those payments–the payments are based on broadcaster cost estimates that are something of a moving target.
FCC chairman Ajit Pai told an NAB Show audience last week that the additional money would be coming very soon, and that it would be a larger allocation than originally expected. The larger allocation is thanks to Congress’ decision to provide an additional $1 billion, if needed, on top of the original $1.75 billion repack fund.
“The availability of these additional funds substantially mitigates the Fund management challenges,” the FCC’s Media Bureau and incentive auction task force said in announcing the added monies.
“Although only a small fraction of Eligible Entities are currently approaching the limit of their initial allocation funding,” they said, “this further allocation ensures all entities continue to have sufficient ongoing access to reimbursement funding…”
The FCC can’t dip into the extra $1 billion until it certifies it will be needed, which would come if that true-up exceeds the $1.75 billion, as it is expected to by virtually everyone including the FCC, which says the current estimate of costs is $1.883 billion.
The FCC got initial broadcaster estimates back in July 2017 totaling $2.115 billion, but that was before all those eligible for the money had weighed in, so it signaled it expected the number to go up. It did, to $2.139 billion in October, after which the FCC reviewed those estimates, which brought it down to $1.864 billion, but with the FCC expecting that to tick up again once broadcasters are actually moving.
In October, the FCC handed out an initial tranche of $1 billion (about 52% of what commercial broadcasters asked for, and 60% for noncommercial stations). That was to cover initial costs, with the rest coming in a further tranche, or tranches.
Most of the repack money goes to broadcasters, though MVPDs are getting some for re-tuning headends to pick up the new channel moves.
The FCC did emphasize Monday (April 16) that while stations may get access to the extra $1 billion form Congress, the 39-month transition deadline and individual phased transition deadlines will not be impacted.
Congress provided the FCC with some extra time to do a final accounting of payments at the end of the reimbursement program, but the FCC makes clear that doesn’t mean it will push its repack deadlines for broadcasters being reimbursed.
“We have provided several tools that will allow us to provide alternative transition solutions that could resolve unforeseen circumstances that could force a station to go dark,” the FCC said. “We reiterate, however, our prior admonition that failure to timely initiate a construction project or undertake necessary steps to complete the transition by the phase transition date due to the amount of any allocation will not be weighed favorably as a factor in considering grants of such relief.”
The FCC has already granted some moves of transition deadlines withing the 39-month window, but has clearly signaled its intention for the window toll close on schedule.
“NAB welcomes the FCC making significant additional repack reimbursement funding available following passage of the RAY BAUM’S Act authorizing additional funding if needed,” said NAB EVP 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.”
“This latest allocation, made possible by RAY BAUM’S Act, demonstrates how Congress is upholding our commitment to broadcasters across the country, and expands access for FM radio stations and FM translators,” said House Energy & Commerce Committee Chairman Greg Walden (R-Ore.). “It’s critical that we provide reimbursement for those broadcasters who were displaced after the successful incentive auctions. Importantly, new relocation funds appropriated by the RAY BAUM’S Act will be allocated over two years, $600 million for 2018, $400 million for 2019, ensuring continued support for broadcasters.”
“America’s Public Television Stations are grateful to the FCC’s Incentive Auction Task Force and the Media Bureau for today’s announcement that an additional $742 million has been allocated to ensure that broadcasters have the resources they need to repack their channels,” said America’s Public Television Stations CEO Patrick Butler. “This additional allocation is possible, in large part, because of the additional $1 billion in repacking funding that America’s Public Television Stations requested and Congress provided in the final FY 2018 omnibus appropriations bill enacted last month.”