TV Repacking Update: Widelity's Price List, and Itinerary, for the Road Ahead

What will channel repacking require in money and effort? FCC-commissioned report itemizes licensees’ anticipated costs of repacking, likely steps toward completion, probable sticking points.

The incentive auction and related spectrum repacking are coming. If you’re a TV licensee and you’ve avoided thinking about what might happen to you when the repacking happens, it’s time to get off the dime. The repacking is approaching. You will need to be ready when it arrives.

To remind us all of that fact, the Commission has released a report providing a reasonably clear, if unpleasant, glimpse of the practical tasks the TV industry has to look forward to.

The Commission hired Widelity, Inc., a communications consulting firm, last September to give the agency, and the TV industry, a better idea of the steps that licensees will need to take, and the expenses they’re likely to face, in carrying out the coming spectrum repacking. The report is the result of Widelity’s efforts. (If you’re fuzzy on the whole repacking idea, take a look at our series on the incentive auction, particularly this post and this post.)

The short version of the bad news: the per station repacking process is likely to cost anywhere from the mid-six figures (in uncomplicated TV markets) to eight figures in the largest urban areas. It’s likely to drag on for at least the better part of a year in even the simplest case and could stretch out for several years in others (and those estimates all assume – unrealistically – that no glitches crop up). And it’s likely to be subject to a wide variety of practical problems.

Sure, Congress has authorized the FCC to use $1.75 billion from incentive auction proceeds to reimburse broadcasters’ (and MVPDs’) reasonable repacking-related costs – but which costs will be deemed “reasonable” remains to be seen. The Widelity report is a first step toward identifying reasonable costs. Widelity interviewed relevant broadcast TV industry players who will have to deal with the literal nuts and bolts of the post-auction TV channel relocations. It also took a look at comments filed by interested parties.

The last 25 pages of the report consist of a “Catalog of Potential Expenses and Estimated Costs” with dollar ranges for most of the identified expenses and costs. Caution: the seemingly comprehensive “catalog” punts on some costs (e.g., obtaining approvals from local government authorities) for which Widelity couldn’t come up with general, industry-wide estimates. TV licensees expecting to find themselves repacked should take a close look at the Widelity’s catalog (including its cost estimates for the various listed items) and be prepared to let the FCC know of any problems they see there.

Before it gets to the nitty-gritty catalog, though, Widelity reviews the lay of the land that will confront broadcasters when the repacking process begins. And it’s not pretty.

That’s because, thanks to the DTV transition a mere five years ago, important resources may be lacking. The channel changes necessitated by the repacking will require many stations to buy new transmitters and antennas. But manufacturers of both have reduced their operations because of an understandable drop in demand following the DTV transition (not to mention the years-long recession). While Widelity reports that equipment manufacturers expect to be able to meet demand resulting from the repacking, it expresses concern about that ability if the demand is “bunched”. In other words, if everybody orders their new gear at the same time, we can all expect delivery delays.

Of course, it’s far from certain that a station’s existing tower will be able to accommodate a replacement antenna without some modification. That means that structural engineers experienced with broadcast towers will have to be figured into the process, and their numbers are “limited”, according to Widelity. Further, they won’t be able to start their analysis of any particular station until that station knows what antenna its repacked facilities will require.

Since many TV towers are already decades old and relevant standards have been tightened since they were constructed, Widelity expects that a lot of towers will require structural reinforcement, if not complete replacement. (Widelity reports that industry sources estimate that as many as 70% of the nation’s towers do not comply with the most recent structural standard.) That determination will require careful study of each existing tower’s specs, a process that will be slowed considerably if documentation about the tower’s original construction isn’t available.

And once the tower has been prepped and the new equipment arrives, the equipment will have to be installed. When antennas have to replaced, tower riggers will be necessary. But according to Widelity, there are no more than 14 tower crews nationwide – and possibly as few as five – “capable of working on complex and tall towers”, i.e., the types of towers used by many TV stations. The situation is slightly better for smaller, non-complex towers – e.g., single sticks less than 400 feet tall: Widelity estimates that there may be as few as 40 crews competent for work on such towers. Helicopters for antenna installation are also in short supply, and their availability in forest fire season is drastically reduced.

In all, Widelity identifies nine elements in the channel repacking process that post-auction stations will experience, beginning with pre-planning (which is complicated by the fact that the new channel assignment won’t be known until the auction is over), and ending with installation of new antennas and transmitters.  At the same time, Widelity describes 16 issues that “are a cause of concern for a smooth post-repacking transition process”.  When the potential problems outnumber the incremental steps to be taken, you can easily anticipate a rough road ahead.

The report does provide a useful overview of each of the nine steps in the repacking process, as well as examples of “decision modeling” (accompanied by some elaborate flow charts) and sample “case studies”.

The Widelity report is, without question, a must-read for every U.S. TV licensee (other, perhaps, than those who have already decided that, come incentive auction time, they’ll be exiting the industry). For those committed to keep operating, it provides a roadmap to guide you through the process. And its detailed description of what’s in store may be sufficiently discouraging to cause some folks who are on the fence to opt against remaining a broadcaster.

The report, however, is only a partial picture. While Widelity can list anticipated costs, it cannot guarantee that the FCC will agree that Widelity’s prices are “reasonable”, or that all of the listed items are compensable. And Widelity can’t reliably estimate a wide range of considerations, such as the cost and time necessary to secure local zoning approvals or environmental clearances, or the ability of some licensees (noncommercial educational institutions in particular) to insure funding, or the development of some form of intra-industry “equipment swap” arrangement that might reduce costs and ease the load on manufacturers, or the ability of the U.S. to reach agreement on spectrum matters with Mexico and Canada. Nor can Widelity say for sure how the FCC will deal with the fact that, while Congress has specified that reimbursements must be paid within three years of the end of the auction, Widelity’s optimistic best case time-line indicates that some, perhaps many, licensees will not have completed their relocation efforts by then.

Still, the report offers an unvarnished look at the road ahead as best as that road can be discerned just now.  TV licensees giving any thought at all to the inevitable post-auction repacking process should read it carefully and take it very seriously.

The FCC has solicited public reaction to the Widelity report. Comments and reply comments may be filed electronically by going to this FCC webpage and uploading them in Proceeding Number 12-268. Comments are due by April 21, 2014; replies are due on May 6.

[Blogger’s aside: We also recommend the impressive photographs of various towers that Widelity has included in Appendix A to its report. They aptly illustrate the complexity of various installations and the effect that Mother Nature can have on them. (Image 8, in particular, artfully shows the famous Mt. Sutro tower poking through a cloud cover). For attorneys who don’t often get to see TV hardware up close and personal, Widelity’s photos offer a helpful and welcome perspective.]

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