As part of its pilot project for meeting transparency, the FCC has released the text of an order on its March agenda to expand channel sharing outside of the auction context. The draft order will fill in many holes in the current channel sharing regime, but it still includes several restrictions on the type of channel sharing agreements that will be permitted.
To understand the draft order, it is useful to review the FCC’s prior actions on channel sharing. In the 2014 Incentive Auction Report and Order, the Commission allowed channel sharing between auction-eligible full power and Class A stations that filed their channel sharing agreements with the FCC prior to the reverse auction application deadline. In June 2015, the Commission adopted its First Order on Reconsideration to allow certain stations to enter into channel sharing agreements after the Incentive Auction. To qualify for post-auction channel sharing, the “sharee” station must: (1) have elected an “intent to channel share” on its auction application; and (2) relinquished its spectrum in the auction. The First Order on Reconsideration also clarified that stations may enter into term-limited channel sharing agreements. However, the Order did not address whether stations could enter into new channel sharing agreements once their original agreements expired, including that among other issues in a Further Notice of Proposed Rulemaking. Then, in the LPTV Third Report and Order, the Commission permitted channel sharing between low power and TV translator stations.
So, to recap the current rules:
- Full power and Class A stations that relinquished spectrum in the auction can channel share with another station that did not relinquish spectrum in the auction.
- Full power and Class A stations cannot channel share after the auction-related sharing windows.
- Any LPTV and TV translator stations can channel share with each other.
- Full power and Class A stations cannot share with LPTV and TV translator stations.
Simple right? The draft order will alter these rules by: (1) allowing full power stations that relinquished their spectrum usage rights in the auction to enter into new channel sharing agreements once their original agreements expire; (2) allowing Class A stations that did not participate in the auction to expand their over-the-air coverage through channel sharing; and (3) permitting channel sharing between primary (full power and Class A) and secondary (LPTV and TV translator) stations in specific circumstances. However, there are several restrictions that could reduce the viability of channel sharing under the draft order.
First, while the FCC will allow full power stations that relinquished spectrum in the auction to enter into subsequent channel sharing agreements, they will remain subject to the auction-related sharing windows. This means that if a station that relinquished its spectrum does not implement channel sharing withing six months of receiving its auction proceeds (subject to up to two three month extensions), then the station must surrender its license and will be unable to channel share in the future.
Second, sharing agreements outside of the auction context will not have the benefit of the flexible community of license rules applicable to auction-related sharing agreements. This could limit the availability of alternative hosts, which must provide a signal over a sharee’s entire community of license.
Third, while the FCC will permit Class A stations that did not participate in the auction to voluntarily surrender their spectrum usage rights to channel share, the same is not true for full power stations. The FCC explained that there is little evidence of demand for full power stations to become sharees.
Fourth, although the draft order will permit sharing between primary and secondary stations–meaning an LPTV station can share on a full power station’s channel or vice-versa–a station that relinquished its spectrum in the auction must commence auction-related sharing with another primary station before it can share with an LPTV or translator station.
There are several additional restrictions on primary-secondary sharing (relating to interference protection and carriage rights) that parties should understand before entering into these agreements.
The biggest beneficiaries of the new rules may be LPTV and TV translator stations, which can use channel sharing to avoid displacement. But the rules may benefit other parties looking to channel share outside the auction context as well.
The FCC is scheduled to vote on the draft order at its March 23 open meeting.