Questions Remain on Reimbursement; More PNs To Come
The FCC reimbursement form and catalog of expenses (see 1510300064) for broadcasters that will be repacked after the incentive auction are designed to be accommodating to a broad range of possible broadcaster needs, but still leave some questions unanswered, broadcast attorneys told us. Though the catalog of expenses lists the kinds of things broadcasters may need reimbursement for, it doesn't list how much those things will cost, with price ranges to be addressed in a later document, said the public notice released Friday. And though Friday's PN makes it clear that broadcasters will need to extensively document the repacking costs for which they plan to seek reimbursement, it's not clear how that documentation will be evaluated, or what the threshold would be for the commission to challenge a reimbursement claim, said Fletcher Heald broadcast attorney Dan Kirkpatrick.
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It's also not clear how quickly broadcasters will be reimbursed after the initial upfront payout, said Wilkinson Barker broadcast attorney Rosemary Harold. A series of PNs on the reimbursement process is expected, which may address some of those questions, Harold said. “The Media Bureau will address additional issues pertaining to the reimbursement process in a series of Public Notices designed to provide additional information and notice about the reimbursement process,” the PN said.
The “baseline estimated costs” for the expenses listed in the catalog will be adopted in a future public notice, the PN said. Before that information is released, the commission will seek comment “on the appropriate means of adjusting the baseline costs for the commonly purchased equipment and services included in the catalog from year-to-year,” the PN said. The expense costs are expected to be released in the form of price ranges, rather than specific prices, to be more accommodating to regional or circumstantial variation, an FCC official told us.
The costs and equipment needs of repacked stations are likely to vary wildly between individual repacked stations, said Don Everist, president of broadcast engineering firm Cohen Dippell. Every station's situation is “unique,” said Everist, meaning antennas and transmitters are essentially custom hardware. The commission took that into account in the catalog of expenses, the PN said. “The catalog is not intended to be exhaustive of the expenses eligible for reimbursement,” said the PN. “The Reimbursement Form includes a catch-all entry (labeled 'other') within each cost category which will allow applicants to submit other expenses not specifically listed in the catalog.” The FCC has done “a good job” creating the form and catalog, Everist said, but the level of customization required by stations may be more than the agency anticipates.
The form also leaves open the question of how the FCC will judge submitted expenses and documentation, Kirkpatrick said. An FCC official told us the commission will judge expenses case by case using a standard of “reasonableness.” The exact standard may not become clear until the process begins, attorneys told us. Many broadcasters may have to buy some equipment internationally, which could lead to nonstandard documentation, Everist said.
The timing of the repacking and the ability of the antenna and tower industries to keep up with it is still a concern for broadcasters, Everist and several broadcast attorneys told us. It's unlikely the issue will be addressed unless it becomes a problem once broadcasters are in the thick of the repacking, Harold said. Since the timing of the reimbursement is based on a congressional statute, broadcasters will likely have to go to Congress to get more time or more reimbursement funds, she said.
Many broadcast attorneys told us that with the recent release of commission items on interservice interference and channel sharing, and the impending deadline for the short-form application in December, they have had little time to address a PN that deals with the repacking, which is farther down the line. Since the auction is optional but the repacking isn't, there are not many options to be presented to clients who are staying in the business, Kirkpatrick said. The rapid-fire timing of the auction items is a “nightmare” for attorneys trying to guide their clients through the process, Harold said.