The National Association of Broadcasters has quite a few bones to pick with the FCC's proposed catalog of expenses it will cover in the repacking and moving of TV stations after the incentive auctions, primarily that they can't be standardized or generalized for the purposes of saving money through bulk buying.
The FCC has $1.75 billion to spend per spectrum auction legislation, but NAB says the FCC's first pass at a list of possible expenses is incomplete. It also wants to disabuse the FCC of the notion it can save money through bulk purchases of equipment.
In reply comments in the FCC's inquiry into how much it will pay and for what, NAB said the FCC's cost-savings efforts via bulk buying were well meaning but not practical because equipment and services are "neither uniform or generic."
It illustrated that point with a series of examples. Among the "station specific" variables in that reimbursement equation are "channel number, geography, tower site location and design, tower load limitations, weather and climate, number of tower users, tower crew availability, spectrum congestion, location of population centers within a market," and more.
NAB agrees that the FCC should come up with an "illustrative" though "nonexhaustive" list of covered expenses, but that the FCC's list is short on "soft costs" like new RF exposure studies, insurance or tax consequences. "Nonexhaustive" means that the FCC should not limit coverage to things on the list, but recognize there will be "less common, unique and unforeseeable circumstances [that] will generate un-catalogued expenses that are no less reasonable and should qualify for reimbursement."
But NAB was not just knocking the FCC's admittedly preliminary proposals. It is also providing its own road map to "ensuring full compensation for non-volunteering broadcasters forced to move in the repacking and preservation of the essential broadcasting services they provide."
That five step plan is:
1. Hire an independent administrator to manage the reimbursement program.
2. Come up with principles for determining the "reasonableness" of costs.
3. Give broadcasters enough time to sufficiently prepare for repacking. That includes not closing the forward auction too soon and giving broadcasters notice of channel reassignments as early as possible.
4. Broadcasters should certify costs as "reasonably necessary to reach the audience in their contour" under penalty of forfeiture if that does not prove to be the case. That would allow broadcasters to self-certify, but provide a stiff penalty for potential waste, fraud or abuse.
5. The FCC should minimize the number of stations that have to relocate so that the fund is sufficient for repacking and that it treat the $1.75 billion as the budget that will determine how many stations it can repack (NAB estimates that only 400-500 stations can be repacked for that sum.)
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