In a defeat for cable operators that could land the FCC in court, the commission's Wireless Telecommunications Bureau has released the final cost catalog for C-band relocation expenses and lump sum elections and it will not compensate cable operators for integrated receiver/decoders (IRDS) as ACA Connects and other cable operators had pushed for.
Including the IRD costs would make it easier for cable ops to move to fiber delivery, but the FCC said the lump sum was meant to approximate the cost of moving earth stations, not moving to a new distribution technology.
Broadcasters and programmers had opposed including the IRDS, so it is a win for that side.
ACAC has threatened to sue the FCC if it excluded costs from the lump sum payment it is offering incumbent earth station operators to pay for moving off of their C-Band spectrum.
IRDs receive and decode satellite signals from programmers and are needed if cable ops move earth stations, but not if they transition to fiber delivery.
The FCC is clearing the lower 300 MHz of the 500 MHz C-Band satellite spectrum for auction to wireless carriers for terrestrial broadband. The incumbent users, including cable operators, are being compensated for their move out of that spectrum.
Cable operators wanted the lump some to include payment for relocating all of their earth stations but be free to use it to transition some or all of their earth stations to fiber delivery instead. ACAC urged the commission "to give earth station operators flexibility to pursue alternative technology upgrade strategies if doing so would be more efficient."
Broadcasters teamed up with TV content companies--broadcast and cable programmers--to ask the FCC not to allow MVPDs to include IRDs in the lump sum.
They argued that the expenses are properly assigned to programmers and satellite operators, not MVPDs. Categorizing IRD costs "would both artificially enlarge the amount of the “lump sum” payments available to MVPDs and undermine the goal of a timely, spectral-ly efficient transition that preserves viewers’ uninterrupted access to the most popular news, sports, entertainment, and other programming."
In releasing the catalog Thursday (July 30), the FCC said agreed with programmers that "the cost of integrated receiver/decoder equipment “is no more a cost of relocating the MVPD’s earth station than that of the ordering of new satellites.”
"ACA argues that not including integrated receiver/decoder costs in the lump sum would 'make it significantly more financially difficult for MVPDs to transition to any alternative technologies that are not dependent on the operator having [integrated receivers/decoders] at an earth station site.' While the 3.7 GHz [C-Band] Report and Order acknowledges that 'providing incumbent earth station operators flexibility may allow them to make efficient decisions that better accommodate their needs,' it also recognizes “that replacing existing C-band operations with fiber or other terrestrial service may be...more expensive by an order of magnitude." The 3.7 GHz Report and Order directs the Bureau to establish lump sum amounts based on the “average, estimated costs of relocating” incumbent earth stations, rather than to attempt to approximate the cost of transitioning to alternative transport."
“Instead of following the clear instructions of the FCC’s February Order to announce a lump sum amount for earth station operators who want to relocate out of the lower portion of C-band on their own, the Wireless Telecommunications Bureau chose to eviscerate the lump sum concept as part of today’s Public Notice," said ACA Connects President Matt Polka. "As a result, hundreds of MVPDs who were relying on the text of the FCC’s Order will now be forced to abandon their shovel-ready plans to deploy and use fiber as a satellite replacement. For most, if not all, ACA Connects members, the Bureau’s meager lump sum payment has turned the Order’s option of transitioning to fiber into a non-option.
“It didn’t have to be this way. The lump sum option included in the FCC’s February Order was the product of reasoned decision making that occurred over a very lengthy period of time. Against the backdrop of the over 2-1/2 years it took for the FCC to get to an order in this proceeding, the Bureau could have taken another couple of months to get the lump sum amount right without compromising the C-band auction schedule or the accelerated transition deadlines. However, in its own rush to get things done, the Bureau has wholly discarded the directions of the Commission, and in turn small cable operators—who never asked for this transition, have nothing to gain from it, and only ask to be made whole—are denied the promises the Commission made to them in the C-band Order."
Polka did not say whether ACAC would sue over the decision, but if his rhetoric is any indication, it would seem likely.
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.