Session Goals Understand the tight timing to implement TV repack - PDF document

5/24/2016 The Post ‐ Spectrum ‐ Auction World for Public TV – Part Deux An FCC and Legal Perspective on Planning Ahead for TV Repack and Post ‐ Auction Operations Margaret L. Miller, Esq. Gray Miller Persh LLP (engineering slides courtesy of Joseph Davis) Session Goals • Understand the tight timing to implement TV repack – its impact on your station and budgets – some of the supply chain challenges for TV repack • Understand the proposed reimbursement process • Understand potential action items for stations (now and later ) Basics of Auction and Repack • Auction – Process ongoing now. Real auction action starts May 31, 2016. – Shhh…. Quiet Period in Effect – Some stations may be bidding, in auction, to change bands to High VHF Channel or Low VHF Channel or to Share Channels – End Date of Auction is Unknown 1

5/24/2016 Basics of Auction and Repack • Repack – Station not in auction (or unsuccessful in auction) may have to change to a new channel in the same band • Coverage areas and service area are protected – FCC to reimburse for “reasonable expenses” for involuntary channel changes • Reasonable expenses • Involuntary channel changes From SI EPR “I ncentive Auction Design Conference” Feb 2013 Graphic or Chart should fit within this blue box Band Plan at 126 MHz Clearing Target • Repacked to Channel 29 and below • At 84 MHz Clearing Target, repack to Ch. 36 and below • Some TV Stations in Wireless Band (?) • Here’s the FCC’s graphic: 2

5/24/2016 Timelines and Milestones • 2012 ‐ Present: Many (many) rulemaking proceedings – Pre ‐ auction process, auction design, opening bid prices, band plan, clearing target and final TV channel assignment process – Maximize “stays” – Minimize total new interference over 1% – Avoid channel changes for stations with high buildout costs Timelines and Milestones • Summer 2015 ‐‐ Baseline technical data – Form 2100, Schedule 381 (Survey) • Fall 2015 ‐‐ Final Catalog of Costs Adopted • 2016 – Incentive Auction – Reverse Auction starts May 31 th – Forward Auction – Final Stage Rule (could go into 2017) Timelines and Milestones • t=0 Channel Reassignment Public Notice – Final TV Channel Assignments and Parameters Announced – Date of Release Unknown • Likely no earlier than 3 rd Q 2016 • Could be into 2017 – All Important Repack Dates Key Off of this Date 3

5/24/2016 Timelines and Milestones • t + 3 months (i.e., 3 months after Channel Reassignment Public Notice) – Stations being repacked must file Construction Permit applications and submit estimated channel relocation costs. – Crunch time! • 3 months to plan new facility and transition to new channel Timelines and Milestones • After t + 3 months – 36 months for “Broadcast Construction Period” begins – CPs are issued – FCC reviews cost estimates and issues “initial allocation” of funds – FCC sets construction deadlines for new channels • Deadline will vary by region, complexity, other factors • Some stations will have less than the full 36 month period Timelines and Milestones • t + 39 months (39 months after Channel Reassignment Public Notice) – Operations on pre ‐ auction channels ceases – 6 month extension of construction deadline until request • Subsequent extensions much stricter 4

5/24/2016 Timelines and Milestones • Implications of t + 39 months – Must go dark if cannot get off old channel – Interim operations will be necessary for many stations • Temporary installation • Reduced facilities • Alternate site/Temporary channel Facility Planning: Limited Opportunity to Pre ‐ Plan – 3 months Graphic or Chart should fit within this blue box Facility Planning Process 1. Pre-planning (t = 0) 2. RF Engineering 3. Structural Engineering 4. Negotiate with tower owners 5. Permitting 6. Estimated Reimbursement Costs to FCC (negotiation?) 5

5/24/2016 Facility Planning ------ After t = 3 months ------ 7. Acquire equipment/manufacturing 8. Tower Work 9. Field Engineering Facility Planning – Expenses • Transmitter • Antenna • Transmission line • Tower Work – Structural Analysis/Structural Work – Limited Number of Structural Engineers Vendor and Service Provider Capacity • Depressed marketplace for equipment • Severe impact on high ‐ power TV antenna manufacturers and tower crews capable of working on tall and complicated towers • Tower Crews: – No more than 14 complex tower crews, current estimate is 5 ‐ 10; 30 ‐ 40 “regional” crews 6

5/24/2016 Vendor and Service Provider Capacity Limited Engineering Resources • Structural Engineers: All firms at peak can do total of 40 structural analyses per month • Field Engineering (Transmitter installation & modification): Now, est. 30 (was 100 through 2009) • RF Consulting Engineers ‐‐ Est. 35, half of which positioned to handle more than 5 ‐ 10 stations Impact on TV Translators/LPTV/DRT • Not protected in Repack • Expectations of Displacement • No Reimbursement for Channel Change Impact on TV Translators/LPTV/DRT • FCC Mitigation – Special filing window for displaced operating facilities • opens after t = 3 months and DTV expansion/alternate channel filing • MX apps – settlement window, DRT priority, then auction – Facilities in 600 MHz band may continue to operate until notified by new licensee (120 day notice); if on guard band must cease at t = 39 months 7

5/24/2016 “Perfect Storm” of Challenges and Shortages – Stations Involuntarily Repacked – Winning Full Power Bidders for Band (Channel) Changes – Expansion Opportunities – TV Translator (and LPTV) Displacement and Digital Buildout • All will draw from the same manufacturer and service provider resources Reimbursement for Eligible Expenses • Reimbursement goes to stations involuntarily repacked – Impact at Shared Sites – TV Stations not Changing Channels – FM Stations and other Tower Users • Does lease/contract specify obligations? Reimbursement Process – Overview TV Broadcaster Relocation Fund – $1.75 Billion established by Congress – Reimburse broadcasters for channel relocation expenses – For non ‐ auction participants and unsuccessful auction participants, but only those who are required to change channels (i.e. “relocate”) – Successful auction participants are not eligible for reimbursement (neither are TV translator/LPTV stations) 8

5/24/2016 Reimbursement Process ‐‐ Overview • Initial allocation of funds – Public TV stations up to 90% of costs allocated in advance [Note the importance of good cost estimates!] • Cost estimates due w/in 3 months after Channel Reassignment Public Notice (t+3) • ATSC 3.0 and Repack (or not) Reimbursement Process – Overview of Cost Estimates • Estimate of costs on FCC Form, using Catalog of Eligible Expenses • Only costs “reasonable to provide facilities comparable to those that a b ‐ caster… had prior to the auction” • Hard and soft expenses (more on that later) Reimbursement Process – Overview of FCC Expectations • Lowest cost equipment that most closely replaces existing equipment • No reimbursement for new features • Reuse own equipment to extent possible; if seek new equipment, must justify (technically) • FCC encourages b ‐ casters to seek out used equipment 9

5/24/2016 Preparing Cost Estimates • Stations may select applicable cost estimates pre ‐ determined in the Catalog, – or provide and justify and document own individualized estimate • Stations must certify belief, in good faith, – Reasonably incur all these costs – Will use money only for eligible expenses – Comply with all draw down procedures, maintain detailed records, file all required documentation Initial Allocation • Initial allocation ‐ based on FCC review of cost forms • Issued to stations in designated individual accounts per FCC vendor payment system • For PTV, initial allocation “up to” 90% of estimated costs • Funds available for draw down as expenses incurred and as documentation is submitted and approved Reimbursement: Some Important Points • Waste & Fraud – Progress reports required – Keep receipts & documentation 10 years – Audit, site visit, data validation by FCC or contractor during and following reimbursement period • For transition concluding after t = 39 months, submit final expense docs – Can dispose of old equipment at will 10

5/24/2016 True ‐ up • Before or at end of 3 year reimbursement period • Stations provide actual and remaining estimated costs • Additional funds allocated as necessary • Prioritization scheme if there is a shortfall in the fund – FCC’s Media Bureau decides • If $$ left over in Station’s account, reverts to US Treasury TV Broadcaster Relocation Fund Reimbursement Form • This Form is your friend – submit for – Info to establish account with FCC for payment purposes – Estimate of Eligible Relocation Costs – Actual cost documentation, as expenses incurred, so that reimbursements can be made – Total expenses occurred TV Broadcaster Relocation Fund Reimbursement Form • This Form (20 pages) available at: http://transition.fcc.gov/Daily_Releases/Daily_B usiness/2015/db1030/DA ‐ 15 ‐ 1238A2.pdf • Instructions (17 pages) available at: FCC Form 2100, Schedule 399 Instructions (2015).docx 11