Despite Not Knowing Where to Aim, CCA Thinks FCC Hit the Mark

Last week, the Competitive Carrier Association (CCA) released a paper arguing that the Federal Communications Commission’s (FCC) randomly selected timeline for completion of broadcaster relocation following the auction is right on the mark. Determining how to develop a timeline for a nationwide repack of broadcasters involves complex engineering challenges, so of course CCA hired . . . an economist(!) to conduct its assessment. At least with this approach, CCA could simply assume the repack will be just fine.

Despite it being in their members’ interest to fully come to grips with how long it will take to clear broadcasters from their 600 MHz channels across the country, CCA’s approach is lackluster and misleading. Following the broadcast spectrum incentive auction, the FCC will require hundreds, if not more than a thousand, stations to move to new channels. No one knows, however, exactly how many stations will be forced to move or even the scope of what those moves will require. Very little preparation can occur in advance, as no station knows if and to where it will move, and in what order it may be required to change channels. While these questions should give any engineer or economist pause, CCA’s paper guarantees us all that it should be no problem to repack an entire nation in just 39 months.

But in the real world, this is more than an academic exercise. Understanding this complex process is essential because, under the FCC’s current rules, every station assigned to a new channel must vacate that frequency within 39 months after the auction. The FCC’s rules provide no exceptions to this, other than the Commission’s general waiver authority. If the FCC forces more stations to change channels than can possibly be repacked in that timeframe, the FCC’s current rules require stations to go dark and viewers to lose television service.

Rather than assume the outcome, NAB approached this problem with rigor. We worked with an engineering consultant, Digital Tech Consulting, Inc. (DTC), which has a staff with decades of experience in broadcasting and that conducted numerous interviews with service and equipment suppliers to determine what was and was not possible. DTC’s report remains the only analysis in the record of the time and resources needed to complete a nationwide repack of television stations, as safely and as quickly as possible.

Given that NAB is most interested in the right, rather than the expedient, answer, we shared that information with stakeholders in the wireless industry, including CCA, long before it was made public. NAB and DTC spent time addressing any and all questions concerning the analysis in an effort to advance a conversation about how the FCC, broadcasters and winning forward auction bidders can accomplish an efficient, rational transition after the auction. NAB even offered to fund a second study overseen in part by the wireless industry to ensure that everyone was working with a diverse set of expert opinions.

Rather than engage in a discussion regarding DTC’s work, CCA instead bought a seven-page paper shopped by an economics professor that contained the answer CCA wanted. The economics professor they hired is perhaps best known to auction followers as the $85 billion dollar man – a nod to his enthusiastic forward auction projections. What he is not known for is his engineering expertise. That helps explain why CCA’s paper contains a number of critical flaws. Here are just a few of the most obvious errors, for starters:

First, CCA asserts that DTC’s estimate of the number of stations that might be repacked is substantially overstated. This is curious, because DTC’s estimate of 860-1,164 stations overlaps with CCA’s estimate of 756-888(sic)* stations. At a minimum, then, CCA’s study confirms that the lower end of the DTC estimate is a reasonable projection. Moreover, DTC based its numbers on publicly available information the FCC has released. CCA based its numbers on an optimization scheme its economics professor invented.

*Note: CCA states “in all cases the total number of stations that must change channels ranges from 756 to 888.” However, the actual values shown in the CCA paper range from 766 to 921 and contain arithmetic errors. Maybe they should have assumed a better calculator.

Second, CCA asserts that the DTC study fails to account for “sources of efficiency found in the field,” such as the deployment of broadband antennas that can operate on a broad range of channels in the UHF band. Unfortunately, CCA did not consult an economics professor with any broadcast engineering experience. Had it found one (or simply hired a broadcast engineer), it would have learned that broadband antennas cannot realistically be used for broadcast TV station repacking in most cases. That is because the FCC is repacking stations specifically to preserve their coverage area and population served, which will necessitate antenna patterns that are specific to each station. A broadband antenna is usually limited to one single antenna pattern across all channels. Thus, a single broadband antenna usually cannot simultaneously replicate the coverage of multiple stations. Instead, most repacked broadcasters will need to rely on specifically manufactured directional antennas.

Third, CCA asserts that DTC significantly understates the number of qualified tower crews available for repacking work. It claims that there are 41 qualified tower crews available right now. That’s interesting, because the FCC’s own Widelity Report concludes that no more than 14 qualified tower crews are available to work on complex and tall towers, and that “there is likely to be more work than these crews can handle in a timely fashion.” The Widelity Report also states that it would take 41 months to complete repacking at a complex site, under ideal conditions – with no unforeseen delays due to weather or zoning issues. As an engineer, I can confirm that 41 months is longer than 39 months. In fairness, CCA’s ivory tower exercise does reference an unpublished “engineering study” that will perhaps attempt to substantiate its claim that 41 qualified tower crews are available. I guess we’ll have to wait for that paper, because CCA apparently hasn’t finished cooking the numbers yet.

Fourth, CCA claims that the repacking task is “modest relative to the DTV transition.” No one who has seriously studied this issue – or was even around during the DTV transition – could possibly come to that conclusion. During the DTV transition, most stations were not required to flash cut to a new channel for their primary signal within a tight timeframe. Nor did broadcasters have to worry whether other stations made the switch to their new channels at exactly the same time to avoid interference to their viewers. Rather, most stations operated simultaneously on two channels, one with a digital signal and one with an analog signal, sometimes for a decade or more. At the transition date, most stations simply turned their analog transmitters off – there was no tower work and little engineering required. That was a vastly simpler transition, yet it was conducted with significantly greater resources than are available now. This flaw could have been avoided by consulting anyone in the broadcasting industry, even economists who are familiar with it.

Finally, the underlying premise of CCA’s “Don’t Worry, Be Happy” analysis is that the supply of necessary resources will simply rise to meet the demand during the FCC’s short repacking window. Apparently loads of new vendors, whom broadcasters are expected to trust despite their total lack of experience, will enter the tower rigging or equipment manufacturing business, drawn like moths to a flame by a business opportunity that will last no more than 39 months. This also begs the question – does CCA’s economics professor believe that supply will necessarily always rise to meet demand? If, instead of 756-888 (sic) stations, the FCC was repacking 1,500 stations, would 39 months still be enough? What if there were 3,000 stations that needed to be repacked? Or 5,000? Would supply just adapt to meet demand? CCA’s economics professor must have been lucky enough to never have ordered a product that had a wait list.

Broadcasters have no desire to delay the post-auction transition. It will be painful and expensive for stations, as well as disruptive for their viewers. But we do not have the luxury of assuming away the problem (or shopping a paper for a hefty price with no consequences if we are completely wrong). The FCC’s policy decisions on this matter should be driven by facts and serious analysis – not by crossing our fingers.