Tuesday, November 18, 2014

How to Estimate the Cost of Channel Relocation

By: Jay C. Adrick, Technology Advisor, GatesAir, Mason, OH

In the first two parts of our 4-part series, we looked at how spectrum repacking and the Incentive Auction will impact the broadcast industry, including tower and transmitter sites. This process was introduced in the FCC’s latest Report & Order issued June 2, 2014. In part 3 of our blog series, we’ll discuss how to estimate the costs and time involved with moving to a new DTV channel assignment.

If your station is likely to be affected by spectrum repacking, then we suggest that you contact your vendors and suppliers right away to get price quotes in writing for the key items you’re likely to need, including:

• Hardware and software for the new transmitter and tower site
• Labor, installation and testing services
• Hiring a consulting engineer to prepare the construction permit application
• Fees for construction, building and other permits
• Hiring electricians, engineers, tower crews and other trades
• Legal and accounting fees you will incur

Develop a timeline for how quickly products and services can be delivered and get commitments from vendor and suppliers to put you on their priority list. This is because, by our estimates at GatesAir, anywhere from a couple hundred to well over 500 DTV stations could be repacked and/or have to move.

The FCC Report and Order setting the rules for the auctions and repacking calls for a 3-month window following the close of the reverse auctions for stations to file for a construction permit (CP) to move to their new channel assignment. If a station is going to take advantage of the relocation funding, they must file a detailed cost estimate as part of the CP application.

Stations will be assigned a timeline based on the FCC’s evaluation of the move complexity. While the timeline is likely to be short, it will in no case be greater than 36 months from the time the CP is issued. This relatively tight timeframe could leave broadcasters competing for services, such as tower crews, broadcast engineering consultants, and systems integrators.

Overwhelming demand could create bottlenecks that put pressure on budgets and deadlines. That’s why we’re encouraging our customers to begin working on a proposal, financial plan and timeline, even though the full details of the spectrum repacking are not yet known.

The Report and Order call for commercial stations to receive 80% of their channel relocation costs upfront and non-commercial stations to receive 90% upfront, when the FCC issues the construction permit. But after the work is completed, broadcasters will need to provide documentation of their actual expenses, such as invoices, to receive the remaining reimbursement. If they’ve over-estimated costs, broadcasters will need to give back a portion of the advance. So spend this time gathering the best information you can to develop an accurate cost assessment and timeline.

In our fourth and final entry, we’ll discuss how GatesAir can help customers with spectrum repacking and channel relocation.