FCC's channel repack estimate eclipses available funds by $365M

FCC headquarters
Image: Ser Amantio di Nicolao/ CC BY-3.0

The FCC’s initial estimates for the cost of the channel repack following the incentive auctions has well exceeded the $1.75 billion allocated for the process.

Jean Kiddoo, chair of the FCC’s Incentive Auction Task Force, on Friday released numbers for TV stations and multichannel video programming distributors (MVPDs) eligible for reimbursement, and the figures were nearly $365 million higher than the allocation.

“Based on information we have received as of 7:00 a.m. today, the aggregate amount of the estimated costs reported by reimbursement-eligible entities is $2,115,328,744.33. We expect to receive additional estimates from MVPDs and a small number of stations. In addition, the initial estimates that comprise this amount will be subject to a careful review by the Commission and our fund administrator. The aggregate cost estimate provided today will therefore change for purposes of the initial allocation of reimbursement funds,” said Kiddoo in a statement.

The NAB was quick to issue a response, saying that the allocation shortfall runs incongruent to Congress’s promise that no TV stations would be punished for not participating in the auctions.

"NAB will work closely with Congress to address this issue, and to additionally ensure that no TV viewer or radio listener loses access to the entertainment and lifeline local broadcast programming they rely on today,” said NAB President and CEO Gordon Smith in a statement.

RELATED: Sinclair wants transmitter headroom included in repack reimbursement

As estimates have officially eclipsed the money set aside for the channel repack, broadcasters have been busy urging the FCC to factor in for other expenses that the repack could incur.

Sinclair Broadcast Group is concerned there is significant disagreement regarding the reasonable reimbursement eligibility of transmitter headroom, or reserved excess transmission capacity, and that not including it could expose many station groups to millions of dollars in financial risk.

The company worried that the FCC’s indication that it would not approve all applications for reimbursement of headroom expenses could be an attempt to “artificially” reduce the cost of the repack.

While groups like the NAB have insisted the FCC be flexible on its 39-month timeline and funding limits for the channel repack, big bidders in the auction like T-Mobile and wireless industry groups like CTIA want the FCC to stick to the plan.