A congressional subcommittee held an oversight hearing Tuesday addressing the Federal Communications Commission’s progress in setting rules for the upcoming incentive auction of television broadcast spectrum for mobile broadband use. On Monday, the FCC released a Public Notice addressing one aspect of those rules, which would govern how TV stations that do not sell their spectrum would be assigned new channels. This process is known as the “repacking” of the broadcast spectrum.

Also Tuesday, a Senate bill that would encourage cable and satellite operators to allow subscribers to purchase channels a la carte picked up its first Democratic co-sponsor, Sen. Richard Blumenthal of Connecticut.

Repacking Public Notice

In Monday’s Public Notice (and its associated technical appendix and data file), the FCC staff describes a possible method for determining what combinations of TV channel assignments would be feasible in the anticipated repacking, taking into account interference concerns and stations’ existing coverage areas. The Public Notice emphasized that, although its description relied on assumptions about how the FCC would resolve certain repacking-related questions, the Public Notice is not intended to pre-judge the actual outcome of those decisions.

For instance, the statute authorizing the incentive auction, enacted February 22, 2012, requires the FCC to “make all reasonable efforts to preserve, as of the date of the enactment of this Act, the coverage area and population served of each broadcast television licensee, as determined using the methodology described in OET Bulletin 69” of the FCC’s  Office of Engineering and Technology. The FCC previously has sought comments on how to interpret this requirement, including on issues such as whether the FCC can revise the software it previously has used to implement OET-69. Broadcasters have argued that the implementing software is an integral part of OET-69 in practice, and as such have objected to the FCC’s proposal to use new software that would produce different calculations of stations’ coverage areas. Monday’s Public Notice included a revised version of the software, known as TVStudy, but the Public Notice emphasized that users can adjust TVStudy’s settings to see what the results would be if the FCC implements OET-69 in various ways.

Other assumptions in the Public Notice on issues still open to FCC consideration include:

• That the FCC will use Option 2 from the Notice of Proposed Rulemaking regarding interference protection. Under this approach, a station could receive interference from another station if the interfering station would not reduce the number of current viewers by more than 0.5%.  Generally speaking, Option 2 is the approach supported by the broadcast industry — but with certain important qualifications and caps that the National Association of Broadcasters and others detailed in their comments to the repacking NPRM earlier this year.
• That only facilities that were licensed when the Spectrum Act was enacted on February 22, 2012 (or the subject of applications for licenses) will be protected.  Broadcast commenters have pointed out that if the FCC were to take this approach, many stations would not be adequately protected (for example, stations that were operating under Special Temporary Authority in February 2012).

Congressional Developments

The House Energy and Commerce Committee’s Subcommittee on Communications and Technology held an oversight hearing Tuesday on the FCC’s progress to date in preparing for the incentive auction, which included discussion of the broadcast repacking process. The witness panel included Gary Epstein, the chairman of the FCC’s auction task force, along with Rick Kaplan for the National Association of Broadcasters and representatives from AT&T, T-Mobile, consumer groups, and the group of broadcasters anxious to sell into the auction.

Although the bulk of the two-hour hearing focused on whether the FCC should limit the ability of AT&T and Verizon to participate in the auction (a position advocated by T-Mobile and others), the Members and witnesses also addressed key issues that have concerned broadcasters. In his opening statement and questions to the panel, Subcommittee Chairman Greg Walden (R-OR) expressed support for broadcasters’ concerns about proposed changes to the methodology the FCC uses to calculate TV stations’ coverage areas (known as OET-69) and the FCC’s freeze on licenses and most modifications. Walden also urged the FCC to develop a repacking plan that protects remaining broadcasters and doesn’t focus solely on freeing up spectrum for auction. A number of Members, led by Rep. John Dingell (D-MI) but including Rep. Walden and Energy and Commerce Committee Chairman Fred Upton (R-MI), urged the FCC to focus on international coordination. During his testimony and subsequent Q&A, NAB’s Kaplan laid out the key points of NAB’s position: that broadcasters need protection, that they are entitled under the spectrum-auction statute to the protection afforded by OET-69 as it was implemented in February 2012, and that the entire auction process should not be overly complex.

Also Tuesday, Sen. Richard Blumenthal (D-CT), who sits on both the Senate Commerce and Judiciary Committees, became the first Democrat to co-sponsor a cable bill introduced by Sen. John McCain (R-AZ). One noteworthy point is that Sen. Blumenthal highlights as one of the “problems” in the 1992 Cable Act the requirement that consumers purchase the basic tier (which includes all local broadcast stations carried on the cable system) before buying other tiers. While the bill does not actually mandate retail a la carte pricing, it would enable cable and satellite operators to let consumers skip the basic tier.