Public notice suggests FCC is looking to cut as many corners as possible.

If you’re a full-power or Class A TV licensee and you haven’t started to do the math relative to what the much-heralded incentive auction could mean for you dollars-and-cents-wise, here’s a CommLawBlog tip – it’s time to get started . . . because the Media Bureau clearly has. Don’t believe us? Check out the Bureau’s request for comments on the “catalog of eligible expenses” that it has compiled. You’ve got until October 31, 2013 to let the Bureau know what you think about its catalog (and some related issues); you’ll also be able to file reply comments until November 14.

The Bureau’s (and the Commission’s) interest here arises particularly from the Middle Class Tax Relief and Job Creation Act of 2012 (what many of us refer to as the Spectrum Act). There Congress established a $1.75 billion “TV Broadcaster Relocation Fund” for reimbursement of certain expenses incurred by broadcasters in connection with the various channel shuffles necessary to make the incentive auction work. Congress left to the FCC the nitty-gritty chore of figuring out just what expenses would be subject to reimbursement.

The Commission has now started on that process, and it’s looking for industry input.

The FCC first hired an outside consulting group – Widelity, Inc. – to ask around among “industry stakeholders” and formulate a “catalog” of setting out the types of expenses broadcasters and MVPDs are “likely to incur as a result of broadcaster channel reassignments”. The resulting catalog spreads over 12 pages of fine print; not surprisingly, it includes a wide range of “hard” (i.e., equipment) and “soft” (e.g., consulting fees) items. Anyone who figures to be lining up at the post-auction Reimbursement Window would be well-advised to take a careful look at the catalog to get a sense of what the FCC expects to be paying for. If you happen to notice that the FCC has overlooked any likely expenses, now would be a good time to clue the FCC in.

Perhaps not surprisingly, the public notice seems clearly geared to a fair amount of nickel-and-diming by the Commission. For example, it asks whether broadcasters normally pay list price, or whether instead they get discounts for bulk orders or for group owners. The Bureau is also curious about whether equipment might be usefully “repurposed” in the channel reassignment process – which suggests some kind of Craig’s List-type of used gear swap to cut costs. Another Bureau suggestion: encourage equipment suppliers to provide “built-in discounts” reflecting “the volume of business that channel reassignments will generate.” 

The Bureau also wonders whether, if the U.S. General Services Administration already includes certain expenses – such as HVAC systems – on its Schedule, broadcasters claiming such expenses should be limited to the GSA-sanctioned limits. And it suggests that mandatory competitive bidding might be warranted for some expenses over a certain limit – although even the Bureau acknowledges that such a requirement would be problematic for some licensees, including particularly non-commercial stations licensed to state governments subject to purchasing rules.

The public notice doesn’t say anything about requiring licensees to patronize equipment suppliers who offer Green Stamps, but we’re guessing the Bureau might be open to that if somebody were to suggest it.

In any event, the Media Bureau is clearly trying to figure out how to stretch the $1.75 billion limit on reimbursements as far as possible. That could result in additional burdens on the TV folks who will eventually be looking to get repaid by the guv’mint. Right now is when those additional burdens are starting to take shape. Because of that, it would be a very good idea for any and all TV licensees likely to be affected by the incentive auction to take a close look at this public notice and be prepared to let the Bureau know what you think. You’ve got until October 31, 2013 to file comments and November 14 to file reply comments.