TV channel sharing

FCC Adopts New Rules for Post-Incentive Auction Channel Sharing – Including Opportunities for LPTV and TV Translators to Increase Over-the-Air Coverage

By David Oxenford on March 24, 2017

Posted in Digital Television, Incentive Auctions/Broadband Report, Low Power Television/Class A TV, Television

At its meeting yesterday, the FCC adopted new rules for post-auction channel sharing by broadcast television stations (see the public notice here, full-text is now available here). Channel sharing was a concept adopted by the FCC in connection with the broadcast incentive auction, to allow two or more stations to share a single 6 MHz TV channel, while retaining separate licenses. To help convince stations to give up their channels in the incentive auction, the FCC allowed licensees to give up their channel in the incentive auction, while retaining their licenses and all the rights that go with these licenses (e.g. the right to sell the license, must-carry/retransmission consent rights, etc.) by sharing a 6 MHz channel with another licensee. The FCC adopted rules for channel sharing in the auction itself (see our summary here). Yesterday’s decision looked at post-auction channel sharing.

The new decision has importance in two principal areas. The first is for stations that entered into channel sharing agreements in connection with the auction that are time-limited rather than of unlimited duration. The second, with perhaps wider impact, is for secondary stations (e.g. LPTV and TV Translator stations). For these secondary stations, real benefits are offered in the potential for increased coverage through sharing with full-power stations.…
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More Incentive Auction News: Last LPTV Request for Stay Denied, Forward Auction Applicants Revealed, Comments Requested on Channel Sharing and Ownership Waivers

By David Oxenford on March 19, 2016

Posted in Broadcast Auctions, Digital Television, Incentive Auctions/Broadband Report, Low Power Television/Class A TV, Multiple Ownership Rules, Television

Late Friday, the US Court of Appeals denied the last pending request for a stay of the incentive auction by LPTV applicants arguing that they should have been classified as Class A stations and included in the “reverse” auction where they can potentially be compensated by the FCC for the surrender of their spectrum. As we wrote Friday, the FCC was ordered to include one of the licensees in the auction on a provisional basis, but last night’s order extended no such relief to the last applicant – denying the Stay request with no comment other than a statement that the applicant had not met the stringent standards required for the grant of a stay – standards which include the likelihood of success on the merits of the underlying appeal. This would seem to clear the legal way for the incentive auction to proceed.

The other major question for all auction participants has always been whether the auction will be a success. As we wrote back when the legislation authorizing the auction was first adopted, the entire incentive auction is premised on the actions of two distinct groups – (1) TV stations willing to give up their spectrum in exchange for significant cash payments and (2) wireless companies willing to buy that spectrum for a sufficient amount of money to cover the buy-out costs of the TV stations and other associated auction expenses. Yesterday, the FCC released a public notice containing the names of 104 prospective bidders in the forward auction – including 3 of the 4 largest wireless companies (only Sprint appears to be missing) and a number of other companies – some recognizable, some not (the list of accepted applicants is here, the list of those who need to supply some additional information before their application is deemed complete is here). While full details of the ownership of these bidders is not yet available on the FCC website, it is expected to be available for review early in the week.…
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The Incentive Auction Moves Forward – FCC Decisions Further Defining Channel Sharing, and Order Setting When Wireless Users “Commence Operations” Ending LPTV Operations

By David Oxenford on October 23, 2015

Posted in Digital Television, Incentive Auctions/Broadband Report, Low Power Television/Class A TV, Television

The FCC seems to almost daily be issuing orders in the incentive auction proceeding, looking to the filing of applications in December by TV stations ready to give up their spectrum to the FCC so that it can be repackaged and resold to wireless users. In the last two days, the Commission has issued orders further clarifying the channel sharing rules and defining when a wireless user of the newly repackaged spectrum “commences operations” requiring that LPTV stations and TV translators operating on frequencies that would cause interference to the wireless operators to cease operations.

On channel sharing, the FCC ruled on a few issues not addressed in earlier channel sharing orders, clarifying issues raised by these prior orders (see our articles on channel sharing agreements here and here) some of which will affect very few TV stations. For instance, it decided that TV stations which entered into channel sharing agreements in which both parties offer their spectrum for surrender can designate alternative channel sharing partners in the event that both stations to the initial sharing agreement are “frozen” in the incentive auction at the same time – meaning that both will be bought out by the FCC if the auction is a success in the round in which they are frozen. While it is commendable that the FCC is providing stations with this flexibility to designate a backup sharing partner in case their initial partner’s station is also bought out in the auction, it would seem that it is unlikely that many stations will put themselves in a position to take advantage of this provision, as most channel sharing agreements will require one station to retain a channel on which the partners in the agreement can operate post-auction. It would seem as if it will be the rare case where all parties to a channel sharing agreement will be subject to being bought out by the FCC at the same time. Probably much more important is the decision of the FCC to extend the dates by which stations that agree to channel sharing agreements must actually implement those agreements after the auction has concluded.…
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Broadcast Incentive Auction Moves Forward – Specific Auction Procedures and Opening Bids Released, Applications to Participate Due By December 18

By David Oxenford on October 19, 2015

Posted in Digital Television, Incentive Auctions/Broadband Report, Television

At the end of last week, the FCC took the expected steps of releasing its public notice setting out the specific procedures for broadcasters interested in participating in the incentive auction by selling their spectrum back to the FCC to be repurposed for wireless broadband, and a notice setting out the specific opening prices that each full-power and Class A TV station will be offered in the auction. These notices also set December 18 as the deadline for stations to submit a new Form 177, declaring if they are interested in participating in the auction. While the dollar numbers to buy out stations perhaps got the most attention, stations need to remember that they are only opening prices – prices which will fall in the reverse auction process until the FCC has only enough interest in stations selling their spectrum to meet its spectrum clearing target. But the release of the numbers and the deadline for participation highlights for many stations the need to focus on the realities of the auction and make their plans for participation (or non-participation) accordingly.

The incentive auction procedures public notice is one that broadcasters need to carefully review and, for those intending to offer their spectrum for sale, to have their economic advisors review as well. Not only does the notice provide information about forms to be completed and the specific steps to be taken by broadcasters to participate in the auction, but it also includes exhibits setting out the mathematical models used by the FCC to determine the descending prices to be offered to broadcasters as the auction continues and when the offers will be frozen (meaning that the FCC has accepted the station’s offer to vacate their current channel, subject to the success of the forward auction raising sufficient funds to pay out the amounts offered to the broadcasters). Exhibits setting out the formulas used to calculate interference between broadcasters remaining after the auction and wireless users are also included in exhibits to the notice. What are some of the other specific issues for broadcasters addressed in the notice?…
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FCC Issues Clarification of Incentive Auction Quiet Period – How Will It Affect Television Station Sales, and What Other Restrictions are Imposed on Broadcasters’ Communications About the Auction?

By David Oxenford on October 9, 2015

Posted in Assignments and Transfers, Broadcast Auctions, Digital Television, Incentive Auctions/Broadband Report, Noncommercial Broadcasting, Television

The FCC this week issued a document called “Guidance Regarding Prohibition of Certain Communications During the Incentive Auction, Auction 1000.” That mouthful of a title identifies a document which clarifies the restrictions which apply during the incentive auction on communications by and between broadcasters (and wireless companies) that could influence the bidding in the auction. In other auction proceedings, these kinds of restrictions have commonly been referred to as “anti-collusion rules.” Here, the FCC talks about “prohibited communications” during the “quiet period.” The quiet period extends from the filing of applications evidencing an intent to participate in the auction (likely to happen in December of this year for TV broadcasters who are interested in offering their channel for surrender the FCC, see our article here about the auction timing and procedures, including a link to the slides from a presentation on auction issues that we conducted for several state broadcast associations), until the very end of the auction when the FCC announces the final results. Thus, this quiet period will potentially extend many months, especially if there are multiple “stages” of the auction where broadcasters offer their licenses for sale and wireless companies bid on the spectrum that has been surrendered. Many broadcasters and other industry participants – from programmers worried about being the conduit of information about broadcasters’ auction intentions, to noncommercial licensees worried about representations to their audiences that could be made during pledge drives – were concerned about the very strict rules initially adopted by the FCC, which prohibited almost any communications by broadcasters that would hint as to their intentions as to whether or not they would participate in the auction. The rules also threatened to bring station sales to a halt during this period. This week’s Guidance should alleviate at least some concerns, but significant restrictions remain, and the FCC demands that auction participants educate their employees about what can and cannot be said during the auction, as a disclosure of bidding strategy or tactics can result in severe penalties.

While the Guidance addresses both broadcasters participating in the Reverse Auction to sell their spectrum to the FCC to be repurposed for wireless uses, and the Forward Auction, where the wireless companies bid on the returned spectrum, we’ll focus on the broadcast issues. There were a number of significant clarifications that affect broadcasters. While we will briefly discuss some of the issues addressed by the Guidance, the penalties for the violation of these rules are so severe, and the rules so nuanced, that we feel the obligation to warn broadcasters not to rely on this summary or any other that you read in the trade press. This is one of those areas where getting legal advice from your own attorney about the ins and outs of these rules is crucial.…
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FCC Announces Comment Dates for Rulemaking on Post-Incentive Auction Channel Sharing and a Delay in Channel Sharing Webinar

By David Oxenford on July 22, 2015

Posted in Broadcast Auctions, Digital Television, Incentive Auctions/Broadband Report, Television

Last week, we noted that the FCC was planning for today a webinar on channel-sharing issues in connection with its incentive auction. That same article also summarized the FCC’s decision modifying the rules for channel sharing. Yesterday, the FCC announced that the webinar has been postponed until August 13, presumably so that the…

FCC to Conduct Channel Sharing Webinar after Revising Rules for Post-Incentive Auction Channel Sharing

By David Oxenford on July 10, 2015

Posted in Digital Television, Incentive Auctions/Broadband Report, Noncommercial Broadcasting, Television

A webinar to explain the new rules for TV stations that want to share 6 MHz channels after the incentive auction (so that the broadcasters sharing the channel post-auction can enjoy the financial benefit of selling one of their channels during the auction), will be held by the FCC on July 22 from 2 to 3 PM ET. Information about the webinar and a place to register can be found on the FCC website, here. This webinar follows the FCC’s recent decision to provide more opportunities and flexibility for post-auction channel sharing, and the FCC’s other recent actions (see our article here) in moving the incentive auction forward. The webinar will also be on the heels of the decision to be announced on Thursday as to specific auction bidding procedures – including issues such as how the amounts of the initial monetary offers to TV stations to surrender their spectrum will be set, and how much those offers will be reduced in the subsequent bidding rounds until the FCC reaches its target amount of TV spectrum to be cleared for sale to wireless users. Today, let’s look at the channel sharing changes made in the FCC’s order released last month.

Channel sharing has been pushed by the FCC as a way for broadcasters to have their cake and eat it too in the incentive auction. By agreeing to share a 6 MHz channel with another broadcaster, a broadcaster can stay in the TV business and, at the same time, offer a channel for sale in the incentive auction and, if they are successful in that auction, reap the financial benefits of the sale (of course, they will have to share some of those benefits with the other station with which they plan to share). The FCC has even promised that stations that share will still be considered independent stations, so they can each sell their stations independently, and each station on a shared channel will have all the must carry and retransmission consent rights that they had when they independently operated on separate 6 MHz channels. But these agreements cannot be entered into without significant planning and forethought.…
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Incentive Auction Moves Forward – Denial of Court Appeal Clears the Way for the Auction, With Procedures to be Clarified at Next Week’s FCC Meeting

By David Oxenford on July 6, 2015

Posted in Broadcast Auctions, Digital Television, Incentive Auctions/Broadband Report, Television

The FCC’s stated goal for some time has been to conduct the broadcast incentive auction in 2016 – buying the spectrum used by a number of TV stations, repackaging it and selling it to wireless companies for wireless broadband purposes. This will happen in a very complicated process where there will be two simultaneous auctions, one for TV stations bidding to surrender their channels, and a second for wireless companies looking to buy that spectrum. Only if there are sufficient bidders on both sides – enough TV stations willing to give up their spectrum to entice the wireless companies to bid, and enough wireless companies willing to bid enough to cover the costs of buying out the TV stations needed to clear the spectrum and paying the costs of many of the remaining stations to change their channels so as to clear a uniform block of spectrum nationwide – will the process be a success. The FCC adopted the general framework for the auction last year. Last month, the Court of Appeals rejected certain appeals of that Order, and the next week, the FCC denied other petitions for reconsideration of that Order – setting the stage for the auction to go forward. The FCC will, at its meeting next week, consider more detailed procedures setting out how the auction will be conducted – all looking to the auction really taking place on schedule in early 2016, with certain required filings this year (including the one due on July 9, about which we wrote here).

The FCC last month also issued orders on Channel Sharing between TV stations (where two stations can combine operations on the same 6 MHz television channel, retaining their cable carriage rights, but enabling them to sell one channel in the auction) and on setting aside a television channel in each market after the auction for unlicensed wireless uses. We will separately write about those two items – but today let’s look at the rejection of the appellate challenges to the auction framework itself, and the impact that these decisions have on broadcasters’ plans going forward.…
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The Latest on the TV Incentive Auction – More Regional Information Sessions by the FCC for Auction that Still Appears Targeted for 2016

By David Oxenford on April 22, 2015

Posted in Broadcast Auctions, Digital Television, Incentive Auctions/Broadband Report, Television

The FCC yesterday announced a number of new regional information sessions on the TV incentive auction, by which the FCC proposes to purchase the spectrum of some TV stations to resell that spectrum to wireless users. At these seminars, the FCC representatives will answer questions from the stations attending, and schedule private meetings with TV owners to discuss the specifics of the amounts that they will initially be offered to surrender their spectrum and other issues unique to their stations. These seminars are just part of the FCC’s efforts to hold that auction in 2016, with preliminary filings by parties interested in participating potentially due later this year.

At the recent NAB Convention, there were repeated statements by FCC officials, including the Chairman himself, that the auction is on schedule to happen next year, and these officials do not seem to be concerned that the wireless companies that will buy this spectrum have stretched their financial resources to a point that would limit their participation in a 2016 auction through their spending in the recently concluded AWS-3 auction. Instead, seemingly the only thing that would slow the auction would be an adverse result in the appeals of the auction rules filed by Sinclair Broadcasting and the NAB – appeals that have been briefed and argued in front of the US Court of Appeals in the District of Columbia. A decision in this case appeal is expected by June, although the court has no official timeline for issuing its ruling. There are other potential appeals of the FCC’s auction rules that could also play into auction timing, though this case is the most advanced. FCC statements have suggested that even an adverse result could be remedied in time for the auction to occur next year – though such optimism may depend on exactly how the court rules, if the court ultimately has concerns about the issues raised in the appeal. Otherwise, the FCC is moving forward, and we expect some clarifications of some other issues very shortly.…
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