Broadcasting Industry Bullish on Pai, Concerned About Spectrum Repacking

February 28, 2017 at 4:17 pm ET

U.S. broadcasters are concerned about what comes next after the Federal Communications Commission’s spectrum auction ends next month, but they’re confident that Ajit Pai (R) will be a strong industry ally during his tenure as FCC chairman.

In conversations with several industry leaders attending the National Association of Broadcasters’ State Leadership Conference in Washington on Tuesday, most participants said the $1.75 billion allocated by Congress to reimburse broadcasters for reshuffling broadcast spectrum post-auction is inadequate.

“They’re probably another $1 billion short,” said Larry Patrick, the managing partner of broadcasting brokerage and investment banking firm Patrick Communications and head of the NAB Education Foundation. He said current repacking projections don’t take into account TV and radio stations that did not participate in the auction but will still see their spectrum shifted as a result.

Hank Littick, president of WHIZ Media Group in Zanesville, Ohio, said, “I would hope that going forward, people are aware in the right places that there’s stations that did not participate [in the auction], or did not receive any winning bids, who still need to get reimbursed for their costs.”

Speaking at the conference, Pai’s chief of staff said the chairman does not believe broadcasters should have to pay out-of-pocket for the shift, and that Pai will remain in contact with industry stakeholders to determine whether the $1.75 billion reimbursement fund is viable. The FCC will examine the cost estimates three months after the auction’s conclusion, Matthew Berry said.

The FCC can press Congress to allocate additional funds for repacking, and the commission should also seek to provide more time for broadcasters to repack spectrum, broadcast executives said Tuesday. The agency has set a deadline of 39 months for repacking, and the clock starts ticking a few weeks after the spectrum auction ends on March 30.

Patrick said that is insufficient time for manufacturers to build new antennas for all affected stations, while David Donovan, the president and executive director of the New York State Broadcasters Association, said the FCC isn’t taking into account inclement weather that can affect regions like upstate New York, where mountaintop antennas are essentially inaccessible for half of the year.

But despite concerns over repacking, there was widespread optimism among broadcasters that Republican leadership at the FCC will prove a boon for the industry.

Littick, whose company owns an AM radio station, said Pai “is certainly well aware of the struggles of AM and the revitalization of parts of AM, and I salute his championing of that cause.”

Patrick suggested that in contrast to former Democratic FCC Chairman Tom Wheeler — whom he described as “very unfriendly to broadcasters” — Pai looks set to expand key industry priorities, such as amending media ownership rules to allow more mergers between broadcasting companies. He cited the FCC’s decision last week to pass a proposed rule authorizing the permissive use of “NextGen” TV technology as a sign of Pai’s broadcaster-friendly agenda.

For Donovan, it’s simply a matter of knowing how broadcasters fit into the regulatory landscape.

“I think we’re excited only because we have a person that finally values broadcasting as part of an overall media mix, and he knows the issues,” Donovan said.

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