Regional Repacking Favored in Wireless, Broadcast Industries

LAS VEGAS -- The FCC should hold a summit of incentive auction stakeholders to plan the repacking process, Commissioner Ajit Pai said Monday at one of several panels on the incentive auction at the NAB Show 2016. Pai praised the idea as a way to resolve the repacking process, which wireless and broadcast industry panelists agreed is extremely complex. “We can't embrace an every-broadcaster-for-itself policy in the repacking,” Pai said. Panelists from NAB and CTA also said Monday that the repacking is complex, speaking about the effects on the industry if the auction were to enter into a second stage after failing to meet its initial clearing target. Since the FCC is required to choose the highest amount of spectrum it believes it can get as a clearing target, some believe that a second stage “will probably happen,” Wilkinson Barker attorney Jonathan Cohen said.

Numerous attorneys and broadcasters at the NAB Show told us they believe a spectrum clearing target will be released in roughly a week. Incentive auction task force officials said it would take three to four weeks after the March 29 start date to announce a clearing target. There had been some speculation that Chairman Tom Wheeler would announce the clearing target when he speaks at the convention Wednesday, but broadcast officials no longer believe that will happen. The FCC wouldn't say when an announcement would be made. The clearing target will determine how much spectrum the FCC will seek in the auction and thus how many broadcasters will be repacked.

Whatever the clearing target, the incentive auction will have to go to a second stage if the FCC is unable to meet it, panelists said Monday. Though that's not commonly seen as a desirable outcome, it could have advantageous results for some auction participants, Hogan Lovells wireless attorney Michele Farquhar said Monday. Since a second stage will have a lower clearing target, less spectrum will be at auction, possibly creating higher demand for what's there, she said. The band plan associated with a smaller clearing target could also be more advantageous to some companies, she said. A lower target band plan could have different or less impaired spectrum, which might also be advantageous to some, NAB Associate General Counsel-Legal Affairs Patrick McFadden said. A second stage is unlikely because the FCC took precautions against it, said former Expanding Opportunities for Broadcasters Coalition executive director Preston Padden. The FCC auction plan includes an “oops stage” that allows the commission to ask wireless carriers in the forward auction to buy enough spectrum to put the FCC over the hump if a second stage is looming, Padden said. As long as the gap is small enough, wireless carriers are likely to do so rather than deal with a second stage, he said.

Wireless and broadcast industry officials on the panel with Pai Tuesday were largely in agreement the FCC should pursue a regional repacking plan, though they differed on specifics. T-Mobile Senior Director-Technology Policy Steve Sharkey backed a plan that divides the U.S. into eight regions, with the repacking starting on the edges of the country and moving in. AT&T Vice President-Federal Regulatory Joan Marsh said the most complicated places for the repacking are on the coasts, so AT&T favors starting there and moving inward. GatesAir consultant Jay Adrick supports a regional plan, but said different regions will need to be handled differently based on their circumstances. Meintel Sgrignoli broadcast engineer Dennis Wallace said it's difficult to create a coherent repacking plan with the clearing target still unknown. “We have to plan something without really knowing what we're planning for.”

Despite general agreement about the basis of a repacking plan, panelists strongly disagreed about the time a repacking effort would take. Sharkey said T-Mobile believes the plan can be accomplished in the FCC's 39-month timeline, while Adrick believes the effort will take four to six years. “We don't think it's helpful to put together a particularly aggressive plan and then face hundreds of waivers,” Marsh said.

The FCC can affect the level of broadcaster repacking expenses through its repacking plan, Wallace said. Broadcasters who move close to their old channel will likely have lower expenses than those repacked on a more distant channel, he said. AT&T supports broadcasters being fully reimbursed for their relocation expenses, Marsh said. If “the pot” of reimbursement funds isn't large enough, there will likely be an effort in Congress to find more funds, she said.