The Deal RoomThe FCC has, for the first time, approved an application for the assignment of the license of a television station that agreed to relinquish its spectrum in the Broadcast Television Incentive Auction but has not yet commenced channel sharing.

These so-called “zombie” or “nomad” licenses have perplexed broadcasters and the FCC staff for months.  In April, shortly after the Commission announced the results of the Incentive Auction, Hero LicenseCo LLC filed an application to assign KBEH to KWHY-22 Broadcasting, LLC.  The rub, however, was that Hero submitted a successful bid in the Incentive Auction to relinquish its spectrum usage rights (in exchange for nearly $150 million).  Although KWHY-22 apparently planned to implement a channel sharing arrangement between KBEH and KWHY-TV (which itself received $123 million to move to a low-VHF channel), the parties sought consent to assign KBEH before KWHY-22 filed its application to channel share (much less implemented sharing).

The FCC sought comment on the KBEH assignment application, explaining that “the sale of a winning relinquishment bidder in conjunction with the implementation of a Channel Sharing Agreement . . . . involves primarily issues of broadly applicable policy rather than the rights and responsibilities of specific parties.”  (Wiley Rein filed comments in response to the Public Notice on behalf of the owners of 43 full power and Class A television stations).  After NCTA – The Internet & Television Association filed comments opposing the application, Hero withdrew the application, and the FCC closed the proceeding.  (Hero subsequently filed an application for KBEH to channel share with KWHY-TV and, after commencing channel sharing, re-filed its application to assign the station).

Today, however, the FCC approved an application to assign KAZA-TV from Southern California License, LLC to TV-49, Inc.  What is notable about this application is that, although Southern California License obtained a construction permit for KAZA-TV to channel share with Class A television station KHTV-CD, the stations have not yet implemented sharing.  Thus, it appears that the Commission has adopted a policy permitting the sale of a winning relinquishment bidder’s license before the station has begun to channel share–at least where the station has obtained a construction permit authorizing it to channel share.

This new approach should allow the FCC to grant other currently pending applications for the assignment of “zombie” or “nomad” stations , and could result in an influx of additional applications.  Of course, this comes just three months before the deadline for winning relinquishment bidders to discontinue operations on their pre-auction channels.  Stations that have not yet filed an application to channel share must submit requests to the FCC no later than October 24, 2017, if they desire an extension of the November 24, 2017, deadline to file their applications to channel share and/or the January 23, 2018 deadline to discontinue operations on their pre-auction channels.

 

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