[Federal Register Volume 84, Number 58 (Tuesday, March 26, 2019)]
[Rules and Regulations]
[Pages 11233-11253]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-05598]



[[Page 11233]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket Nos. 18-214, GN Docket No. 12-268; FCC 19-21]


LPTV, TV Translator, and FM Broadcast Station Reimbursement

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission adopts rules to implement 
Congress's directive in the 2018 Reimbursement Expansion Act (REA) that 
the Commission reimburse certain Low Power Television and television 
translator stations and FM broadcast stations, for costs incurred as a 
result of the Commission's broadcast television spectrum incentive 
auction. In the REA, Congress provided additional funding for the TV 
Broadcaster Relocation Fund and expanded the list of entities eligible 
to receive reimbursement for costs reasonably incurred as a result of 
the reorganization of broadcast television spectrum to include LPTV/
translator and FM stations. This document adopts rules relating to 
eligibility, expenses, and procedures the Commission will use to 
provide reimbursement to these entities and mandates the use of various 
measures designed to protect the Reimbursement Fund against waste, 
fraud, and abuse.

DATES: Effective date: These rules are effective April 25, 2019.
    Compliance date: Compliance will not be required for Sec.  73.3701 
until the Commission publishes a document in the Federal Register 
announcing the compliance date.

FOR FURTHER INFORMATION CONTACT: Maria Mullarkey, 
[email protected] of the Media Bureau, (202) 418-1067. For 
additional information concerning the PRA information collection 
requirements contained in this document, contact Cathy Williams, 
Federal Communications Commission, at (202) 418-2918, or via email 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order (R&O), MB Docket Nos. 18-214; GN Docket No. 12-268; FCC 19-
21, adopted on March 15, 2019 and released March 15, 2019. The full 
text is available for inspection and copying during regular business 
hours in the FCC Reference Center, 445 12th Street SW, Room CY-A257, 
Portals II, Washington, DC 20554. This document is available in 
alternative formats (computer diskette, large print, audio record, and 
Braille). Persons with disabilities who need documents in these formats 
may contact the FCC by email: [email protected] or phone: 202-418-0530 or 
TTY: 202-418-0432.
    Compliance date: The amendments of the Commission's rules as set 
forth in the Final rules section are effective thirty (30) days after 
publication in the Federal Register. Section 73.3701 contains new or 
modified information collection requirements that require review by the 
Office of Management and Budget (OMB) under the Paperwork Reduction 
Act. Compliance will not be required for Sec.  73.3701 until after 
approval by the Office of Management and Budget. The Commission will 
publish a document in the Federal Register announcing that compliance 
date.
    Paperwork Reduction Act of 1995 Analysis: This document contains 
new or modified information collection requirements. The Commission, as 
part of its continuing effort to reduce paperwork burdens, will invite 
the general public and the Office of Management and Budget (OMB) to 
comment on the information collection requirements contained in this 
document in a separate Federal Register Notice, as required by the 
Paperwork Reduction Act of 1995, Public Law 104-13, see 44 U.S.C. 3507. 
In addition, pursuant to the Small Business Paperwork Relief Act of 
2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission 
previously sought specific comment on how the Commission might further 
reduce the information collection burden for small business concerns 
with fewer than 25 employees.
    Congressional Review Act: The Commission will send a copy of this 
R&O to Congress and the Government Accountability Office (GAO) pursuant 
to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

Synopsis

    1. In this R&O, the Federal Communications Commission (Commission) 
adopted rules to implement Congress's directive in the 2018 
Reimbursement Expansion Act (REA) that the Commission reimburse certain 
Low Power Television (LPTV) and television translator (TV translator) 
stations (together LPTV/translator stations), and FM broadcast stations 
(FM stations), for costs incurred as a result of the Commission's 
broadcast television spectrum incentive auction. In the REA, Congress 
provided additional funding for the TV Broadcaster Relocation Fund 
(Reimbursement Fund) and expanded the list of entities eligible to 
receive reimbursement for costs reasonably incurred as a result of the 
reorganization of broadcast television spectrum to include LPTV/
translator and FM stations. This R&O adopts rules relating to 
eligibility, expenses, and procedures the Commission will use to 
provide reimbursement to these entities and mandates the use of various 
measures designed to protect the Reimbursement Fund against waste, 
fraud, and abuse.

Amounts Available for Reimbursement

    2. The Commission concludes that the REA permits it to use the 
funds appropriated to the Reimbursement Fund for fiscal year 2019 to 
reimburse eligible LPTV/translator and FM stations as well as full 
power and Class A stations and MVPDs. The Commission also concludes 
that it will prioritize payments to full power, Class A, and MVPD 
entities over payments to LPTV/translator and FM stations. 
Specifically, the Commission will use the $400 million appropriated for 
fiscal year 2019 first to reimburse full power, Class A, and MVPD 
entities for any expenses eligible for reimbursement that have not 
already been reimbursed before using any remaining fiscal year 2019 
funds to reimburse LPTV/translator and FM stations for eligible 
expenses not already reimbursed above the amounts allocated for those 
purposes by the REA for fiscal year 2018. All commenters that addressed 
the issue of the Commission's discretion to use fiscal year 2019 funds 
agreed that the statute permits the funds to be used to reimburse any 
eligible recipient of reimbursement funds. No commenter argued that the 
$400 million for fiscal year 2019 is only available to reimburse 
eligible full power and Class A stations and MVPDs.

Statutory Interpretation

    3. The REA appropriates a total of $1 billion in additional funds 
for the Reimbursement Fund, $600 million in fiscal year 2018 and $400 
million in fiscal year 2019. Section 511(j)(2) of the REA discusses the 
``availability of funds'' and provides that, if the Commission makes 
the required certification, ``amounts made available to the TV 
Broadcaster Relocation Fund by [Section 511(j)(1)] shall be available 
to the Commission to make'' certain specified payments. In particular, 
Section 511(j)(2)(A) states that funds appropriated in Section 
511(j)(1) shall be available to the Commission to make payments 
required by the Spectrum Act and the REA, including ``not more than'' 
$350 million to reimburse full power and Class A stations and MVPDs 
from

[[Page 11234]]

fiscal year 2018 funds, ``not more than'' $150 million to reimburse 
LPTV and TV translator stations from fiscal year 2018 funds, and ``not 
more than'' $50 million to reimburse FM stations from fiscal year 2018 
funds. It also states that funds appropriated in Section 511(j)(1) 
shall be available to the Commission to make payments ``solely for the 
purposes of consumer education relating to the reorganization of 
broadcast television spectrum,'' including $50 million from the funds 
available for fiscal year 2018. The REA contains no such express 
delineation of how the funds available for fiscal year 2019 are to be 
allocated. The Commission sought comment in the Notice of Proposed 
Rulemaking (NPRM) (83 FR 43613) on whether the $400 million 
appropriated to the Reimbursement Fund for fiscal year 2019 is 
available only to reimburse eligible full power and Class A stations 
and MVPDs or whether the REA also permits this money to be used to 
reimburse LPTV, TV translators, and FM stations as well as to fund the 
Commission's consumer education efforts.
    4. The Commission concluded that the REA does not prohibit use of 
the $400 million appropriated to the Reimbursement Fund for fiscal year 
2019 from being paid to any specific category of eligible station or 
for consumer education. This interpretation of the statute is 
consistent with widely-accepted principles of statutory construction. 
The REA contains no limitations on how to allocate the fiscal year 2019 
funds among the various eligible entities and consumer education. 
Therefore, the Commission believes the text of the statute plainly 
provides it with authority, or at minimum can reasonably be construed 
as providing the Commission with authority, to use fiscal year 2019 
funds to reimburse all entities eligible under the statute and for 
consumer education.

Prioritization of Fiscal Year 2019 Funds

    5. The Commission will prioritize the payment of fiscal year 2019 
funds to full power and Class A stations and MVPDs over the payment of 
newly eligible LPTV/translator and FM stations. After eligible full 
power, Class A, and MVPD entities have been reimbursed using fiscal 
year 2019 funds, any funds remaining from the $400 million appropriated 
for fiscal year 2019 will be used to reimburse eligible LPTV/
translators and FM stations. The Commission agreed with American Cable 
Association (ACA) that this approach toward prioritization of fiscal 
year 2019 funds is most consistent with Congress's intent with respect 
to reimbursement. Full power, Class A, and MVPD entities were 
Congress's top priority for reimbursement when it adopted the Spectrum 
Act, which established the Reimbursement Fund and allocated $1.75 
billion to be used to reimburse eligible full power and Class A 
stations and MVPDs for their incentive auction-related expenses. 
Further, in the REA, Congress appropriated $350 million for full power, 
Class A, and MVPD entities in fiscal year 2018 as compared with 
appropriations of $150 million for LPTV/translator stations and $50 
million for FM stations in fiscal year 2018. In light of Congress's 
prioritization of full power, Class A, and MVPD entities with respect 
to the amount of money appropriated for reimbursement of these 
entities, the Commission believed it is appropriate to use the $400 
million appropriated for fiscal year 2019 to first reimburse full 
power, Class A, and MVPD entities before using any remaining fiscal 
year 2019 funds to reimburse newly eligible entities.
    6. While no commenter argued that the Commission should not 
prioritize between eligible entities if there is a shortfall of funds, 
some contended that the Commission should postpone a prioritization 
decision until more information is available. However, the Commission 
disagreed with National Association of Broadcasters (NAB) and HC2 that 
it should wait to adopt a prioritization scheme until after LPTV/
translator and FM stations have submitted cost estimates and, at that 
point, only if it becomes clear that the demand on repacking funds will 
exceed the funds available, making prioritization necessary. If the 
Commission were to defer making a prioritization decision until LPTV/
translator and FM station cost estimates are submitted and evaluated by 
the Commission and Fund Administrator, this could delay payments to all 
reimbursable entities from the fiscal year 2019 funds, as none of those 
funds could be spent until a full assessment of the demand of all 
entities was completed. In addition, establishing a prioritization 
method later could require additional public comment, further delaying 
the distribution of fiscal year 2019 funds. As noted above, the 
Commission's determination that the $400 million allocated for 2019 
should be used first to pay full power, Class A, and MVPD entities is 
consistent with congressional priorities, making any delay in 
developing a prioritization scheme unnecessary.
    7. The Commission also declined to adopt NAB's argument that 
primary full power FM stations should be prioritized over secondary 
LPTV and TV translator stations. NAB argued that, because LPTV stations 
are secondary licensees and therefore subject to displacement by full 
power and Class A television stations, they should ``yield to primary 
licensees with respect to reimbursement'' as they do with respect to 
licensing. The Commission rejected this approach. The text of the 
statute suggests no such priority for FM stations vis-[agrave]-vis LPTV 
and TV translator stations, which serve as an important source of 
programming in many communities.

LPTV and TV Translator Stations--Eligibility and Expenses

Stations Eligible for Reimbursement

    8. LPTV/Translator Stations. The Commission found that pursuant to 
the REA, LPTV/TV translator stations, as defined by the Commission's 
rules, are eligible for reimbursement from the Reimbursement Fund if 
they satisfy the remaining eligibility criteria.
    9. Special Displacement Window Criteria. The Commission adopted its 
tentative conclusion that, in order to be eligible for reimbursement, a 
station must be an LPTV/translator station that was eligible to file 
and did file an application during the Special Displacement Window. In 
order to be eligible to file in the Special Displacement Window, the 
LPTV/translator station must have been ``operating'' on April 13, 
2017--the date of the release of the Closing and Channel Reassignment 
Public Notice. For this purpose, a station was ``operating'' if it 
either had licensed its authorized construction permit facilities or 
had an application for a license to cover on file with the Commission 
on that date. Further, in order to be eligible to file in the Special 
Displacement Window, a station must also have been ``displaced . . . as 
a result of the broadcast television spectrum incentive auction.''
    10. The Commission further adopted its tentative conclusion that, 
to be eligible for reimbursement, a station's displacement application 
filed during the Special Displacement Window (or prior to the window 
with grant of a waiver, or subsequently amended prior to the close of 
the Settlement Window) must have been granted. The Commission continues 
to believe that this additional criterion is essential to ensure the 
integrity of the reimbursement program and is consistent with Section 
511(k)(1), which requires reimbursement of only costs reasonably 
incurred to ``relocate . . .

[[Page 11235]]

television service from one channel to another channel . . . or 
otherwise modify [a] facility.'' The Commission believes that 
eligibility must be limited to stations with valid displacement 
construction permits, obtained through the procedural mechanisms 
associated with the Special Displacement Window, that will permit them 
to construct the displacement facilities for which they receive 
reimbursement. Otherwise, providing reimbursement to eligible stations 
whose applications are not granted will result in reimbursement for 
expenses related to facilities that will not be constructed to 
``relocate . . . television service from one channel to another channel 
. . . or otherwise modify [a] facility.'' NAB supported defining 
eligibility to include stations that were granted displacement 
construction permits as a result of filing a Special Displacement 
Window application, arguing that ``any other outcome would risk 
reimbursing stations for facilities that they are ineligible to 
construct, which would only waste funds.'' No commenter opposed this 
tentative conclusion.
    11. The Commission adopted its tentative conclusion that if an 
LPTV/translator station displaced by the repacking process filed in the 
Special Displacement Window, had its application dismissed, and 
subsequently files a displacement application when the Media Bureau 
lifts the freeze on the filing of such applications, it will be 
eligible for reimbursement under the REA if its later-filed 
displacement application is granted. NAB and HC2 supported this 
tentative conclusion, and no one opposed it. Although they would 
receive their construction permit through a displacement application 
that was not filed during the Special Displacement Window, the 
Commission concluded that these stations meet the threshold eligibility 
criteria under the REA because such stations were ``eligible to file 
and [did] file an application'' in the Special Displacement Window. The 
Commission concluded that such stations are affected by the 
reorganization of broadcast television spectrum in the same way as 
other displaced LPTV/translator stations. Such stations may request and 
be granted a waiver of any reimbursement program filing deadlines that 
occur prior to that station's filing of the construction permit 
application. However, for practical purposes, the Commission will limit 
such stations to only those that have a granted construction permit by 
whatever final deadline the Commission set for the submission of 
reimbursement expenses and only to the extent funds remain available 
for LPTV/translator stations in the Reimbursement Fund.
    12. Licensed and Transmitting Eligibility Criteria. The Commission 
adopted its proposals as set forth in the NPRM defining the REA's 
mandate that stations must be ``licensed and transmitting for at least 
9 of the 12 months prior to April 13, 2017'' to be eligible to receive 
reimbursement. The statute specifies that ``the operation of analog and 
digital companion facilities may be combined'' for purposes of the 
``licensed and transmitting'' requirement. Stations that were licensed 
or that had an application for a license to cover on file with the 
Commission on April 13, 2017, will be considered ``licensed'' for 
purposes of REA reimbursement eligibility.
    13. With regard to the ``transmitting'' element, the Commission 
adopted its proposed definition requiring that LPTV/translator stations 
must have been operating not less than 2 hours in each day of the week, 
and not less than a total of 28 hours per calendar week for 9 of the 12 
months prior to April 13, 2017, in order to be eligible for 
reimbursement. This approach relies on the Commission's minimum 
operating schedule rule for commercial full power television broadcast 
stations. Given the finite nature of the Reimbursement Fund, it is 
necessary to give reasonable meaning to the eligibility criteria set 
forth in the REA, including the requirement that stations must have 
been ``transmitting'' during the relevant period. The Commission 
believes that this requirement reflects the legislative mandate that 
only ``transmitting'' stations be eligible to receive reimbursement.
    14. HC2 supported imposing minimum operating requirements for 
stations to meet the ``transmitting'' component of the reimbursement 
eligibility criteria, and NAB expressed general agreement with the 
Commission's proposals to define LPTV/translator stations eligible for 
reimbursement. The Commission agreed with HC2 that ``it is appropriate 
for the limited pool of LPTV reimbursement funds to be applied to LPTV 
stations that have demonstrated their commitment to, and have invested 
resources in, consistent operations.'' The Commission disagreed with 
the LPTV Spectrum Rights Coalition (LPTV Coalition) that, because there 
is no minimum daily operating requirement for LPTV/translator stations 
in the Commission's rules, the Commission's proposal is inconsistent 
with actual business practices based on the rules. The Commission did 
not believe that the current rules on LPTV/translator station operating 
requirements should be determinative of the meaning of ``transmitting'' 
in the REA for purposes of eligibility for reimbursement. Congress 
expressly included a ``transmitting'' requirement in the statute, and 
the Commission found that the inclusion of this requirement reflects 
Congress's intent to ensure that reimbursement funds are placed into 
the hands of stations that are actually operating and whose viewers 
stand to lose service as a result of their displacement absent such 
reimbursement. Further, because there are no minimum operating 
requirements for LPTV/translator stations in the Commission's rules, 
Congress could not have intended to use the transmitting rule 
applicable to LPTV/translator stations to define ``transmitting'' 
because that would render the term superfluous.

Other Eligible Stations

    15. Early Displaced Stations. The Commission adopts the NPRM's 
proposal that LPTV/translator stations that were displaced prior to the 
opening of the Special Displacement Window but were eligible to file 
and did file in the Special Displacement Window are eligible for 
reimbursement under the REA. Commenters support the proposal, and no 
commenter opposes it. As noted above, approximately 340 LPTV/translator 
stations were displaced prior to the Special Displacement Window due to 
T-Mobile's decision to commence operations or conduct FAA testing on 
some of its 600 MHz spectrum prior to the Special Displacement Window. 
The Commission provided tools for these early-displaced stations to 
continue to be able to operate, including allowing the stations to 
submit displacement applications prior to the opening of the Special 
Displacement Window with a request for waiver of the current 
displacement freeze, together with a request for Special Temporary 
Authority to temporarily operate the facility. The Commission also 
explained that it would treat these applications as if filed on the 
last day of the Special Displacement Window and process them in 
accordance with the rules for that window. As a result, these stations 
are eligible for reimbursement.
    16. Replacement Translators. The Commission adopts the NPRM's 
proposal finding that analog-to-digital replacement translators (DRTs) 
are eligible for reimbursement pursuant to the REA. In the Incentive 
Auction R&O (79 FR 48442), the Commission

[[Page 11236]]

concluded that DRTs authorized pursuant to Sec.  74.787(a)(5) of the 
Commission's rules that were displaced by the incentive auction and 
repacking process were eligible to file displacement applications 
during the Special Displacement Window. Because DRTs were displaced as 
a result of the reorganization of broadcast television spectrum, were 
eligible to file in the Special Displacement Window, and are considered 
``TV translators'' and licensed under the same part 74 rules as other 
TV translator stations, the Commission concluded that displaced DRTs 
also are eligible for reimbursement pursuant to the REA, provided that 
they meet the other eligibility requirements. NAB generally supports 
this proposal, and no commenter opposes it.
    17. The Commission adopts the NPRM's tentative conclusion that 
digital-to-digital replacement translators (DTDRTs) are not eligible 
for reimbursement under the REA. In the LPTV DTV Third R&O (81 FR 
5041), the Commission established a new DTDRT service to allow eligible 
full power television stations to recover lost digital service area 
that could result from the repacking process. The Commission concluded 
that full power stations could begin to file for DTDRTs beginning with 
the opening of the Special Displacement Window on April 10, 2018, and 
ending one year after completion of the incentive auction transition 
period. Although they were eligible to file in the Special Displacement 
Window, and DTDRTs are similar to DRTs in that they are considered ``TV 
translators'' and licensed under the same Part 74 rules as other TV 
translator stations, the Commission concludes that new DTDRTs are not 
eligible for reimbursement under the REA because they would not have 
been ``licensed and transmitting'' for 9 of the 12 months prior to 
April 13, 2017, as required by the statute. In addition, even if they 
were otherwise eligible under the statutory criteria, DTDRTs are newly 
established facilities and thus are not ``relocat[ing] . . . from one 
channel to another channel'' or ``modify[ing]'' their facilities as 
required by the statute. NAB generally supports this tentative 
conclusion, and no commenter opposes it.
    18. Class A Television Licensees. The Commission adopts its 
tentative conclusion in the NPRM that (1) Class A stations reimbursed 
from funds under the Spectrum Act or the additional full power/Class A 
funding in the REA are not eligible for reimbursement from funds 
dedicated to LPTV/translator reimbursement under the REA; and (2) ``a 
low power station that has been accorded primary status as a Class A 
television licensee that receives reimbursement under Section 511(k)(1) 
of the REA'' and ``that filed in the Special Displacement Window'' is 
not eligible for reimbursement under the Spectrum Act. No commenter 
disagrees with its interpretation.
    19. Further, the Commission finds that the group of Class A 
stations (the ``Class A Commenters'') that filed for and obtained their 
Class A licenses after February 22, 2012, but were not eligible to 
participate in the incentive auction or receive reimbursement under the 
Spectrum Act and were subsequently displaced as a result of the 
repacking process but availed themselves of the opportunity to file for 
a new channel in the first ``priority'' filing window for repacked 
stations in 2017, are not eligible for reimbursement from REA funds 
dedicated to LPTV/translator stations. The Class A Commenters assert 
that their Class A stations should be eligible for reimbursement under 
the REA. In the incentive auction proceeding, the Commission declined 
to protect in the repacking process Class A licensees that did not file 
an application for a Class A authorization until after February 22, 
2012, the date of enactment of the Spectrum Act. The Class A 
Commenters' stations were among the Class A stations that were not 
protected in the repacking as a result of this decision. Moreover, they 
were not eligible for reimbursement under the Spectrum Act. The Class A 
Commenters acknowledge that the REA establishes certain eligibility 
criteria in order to claim reimbursement of costs reasonably incurred 
as a result of the repacking. They contend, however, that their Class A 
stations meet these eligibility criteria for reimbursement under the 
REA. The Commission disagrees.
    20. The REA specifies that a ``low power television station'' 
eligible for reimbursement is one ``defined in Sec.  74.701 of title 
47, Code of Federal Regulations . . . that was licensed and 
transmitting for at least 9 of the 12 months prior to April 13, 2017.'' 
The Class A Commenters' stations have been Class A television stations, 
which are authorized under part 73 of its rules, since 2013 when they 
filed license applications to convert their low power television 
stations to Class A status. At no time during the relevant time period 
for reimbursement under the REA--April 13, 2016, through April 13, 
2017--were they authorized or operating as low power television or 
television translator stations under part 74 of its rules. Although 
Class A Commenters argue that Congress must have intended to include 
Class A stations in the definition of LPTV in the REA because otherwise 
Section 1452(k)(3) would be rendered ``superfluous,'' the Commission 
disagrees. Rather, the Commission believes that Section 1452(k)(3) 
reinforces Congress's intent that for purposes of the REA, like the 
Spectrum Act and reimbursement program generally, the two categories of 
stations remain distinct.
    21. In addition, the REA provides that ``[o]nly stations that are 
eligible to file and do file an application in the Commission's Special 
Displacement Window are eligible to seek reimbursement.'' The 
Commission interprets the statutory term ``Special Displacement 
Window'' in accordance with the Commission's use of that term before 
the passage of the REA because neither the REA nor the Communications 
Act defines the term, and ``Congress' repetition of a well-established 
term generally implies that Congress intended the term to be construed 
in accordance with pre-existing regulatory interpretations.'' 
Consistent with the Commission's use of the term ``Special Displacement 
Window,'' the Commission interprets that term as limited to the filing 
window opening on April 10, 2018 and closing on June 1, 2018 during 
which operating LPTV/translator stations subject to displacement had an 
opportunity to file for a new channel. In contrast, the Class A 
Commenters filed construction permit applications for new channels 
during the first ``priority'' filing window for repacked stations in 
2017, and not during the Special Displacement Window that opened in 
2018, and thus they fail to satisfy the second prong of the statutory 
eligibility standard. The Commission disagrees that the term ``Special 
Displacement Window'' in the REA should be interpreted to include 
applications filed in the first priority filing window. When the 
Commission declined to exercise its discretion to protect approximately 
100 out-of-core Class A eligible LPTV stations that had not filed a 
Class A application by February 22, 2012, it stated that any LPTV 
station that filed a Class A application after that date and was 
displaced in connection with the incentive auction would be provided 
``with an advance opportunity to locate a new channel.'' The Commission 
later specifically identified that ``advance opportunity'' as the 
``first filing opportunity'' for alternate channels. Commission 
statements evidence an intent that the early filing opportunity for 
displaced Class A stations be treated

[[Page 11237]]

separately from the Special Displacement Window for displaced LPTV/
translator stations. Thus, the Commission disagrees that the term 
``Special Displacement Window'' in the REA should be interpreted to 
include applications filed by the Class A Commenters during the first 
priority filing window.
    22. Class A Commenters also argue that finding them eligible would 
be consistent with ``Congress's desire to ensure that all broadcasters 
are reimbursed for their costs incurred as a result of the post-auction 
transition.'' The REA, however, does not require that the Commission 
reimburse all broadcasters for their costs. The REA specifically limits 
reimbursement to costs reasonably incurred after January 1, 2017, by 
LPTV/translator stations that were displaced by the incentive auction, 
were licensed and operating for nine of the 12 months prior to April 
13, 2017, and which filed during the Special Displacement Window. 
Congress restricted eligibility under the REA to LPTV/translator 
stations that, as defined by Sec.  74.701 of the rules, filed 
displacement applications during the Special Displacement Window--a 
group that does not include part 73 Class A television stations that 
were permitted to file for and obtain new channels outside the Special 
Displacement Window.

Expenses Eligible for Reimbursement

Costs Reasonably Incurred
    23. The REA provides that the Commission ``shall reimburse costs 
reasonably incurred by a television translator station or low power 
television station on or after January 1, 2017, in order for such 
station to relocate its television service from one channel to another 
channel or otherwise modify its facility as a result of the 
reorganization of broadcast television spectrum'' under the Spectrum 
Act. The Commission adopts the NPRM's tentative conclusion that 
equipment and other costs necessary for an eligible LPTV/translator 
station to construct the facilities authorized by the grant of the 
station's Special Displacement Window application shall be considered 
costs ``reasonably incurred,'' subject to the specific restrictions 
described herein. Commenters generally support its tentative conclusion 
that equipment and other costs necessary to construct the facilities 
authorized by grant of a Special Displacement Window application be 
considered ``reasonably incurred'' under the REA.
    24. The Commission affirms its belief that the ``comparable'' 
facilities reimbursement standard adopted for repacked full power and 
Class A stations cannot, as a technical matter, be applied to displaced 
LPTV/translator stations. As it explained in the NPRM, the post-auction 
channel assignments for full power and Class A stations specified in 
the Closing and Channel Reassignment PN were made at stations' existing 
locations and largely replicated stations' pre-auction facilities, 
while displaced LPTV/translator stations may need to move their 
transmitter and antenna locations as well as change channels. In 
addition, in order to continue providing service to viewers from a new 
site, displaced stations may need to increase effective radiated power 
and height which could require the purchase of other equipment not 
necessarily ``comparable'' to existing equipment. Below, the Commission 
offers additional clarification about the eligibility of specific 
expenses that were addressed in the record.
    25. Full Service Mask Filters. The Commission finds that the costs 
for full service mask filters are reimbursable if they were specified 
in the station's Special Displacement Window application as granted by 
the Commission. Consistent with its finding that the equipment and 
other costs necessary to construct the facilities authorized by grant 
of a Special Displacement Window application will be deemed 
``reasonably incurred'' under the REA, the Commission also finds that 
displaced stations will be permitted to seek reimbursement for the 
costs associated with the emission mask specified in their granted 
construction permit application. The Commission notes that even prior 
to the release of the NPRM in August 2018, LPTV/translator stations 
that filed in the Special Displacement Window had already determined 
what level of filter to utilize and specified that filter in the 
station's Special Displacement Window application. To date, over 94 
percent of these applications have already been granted or dismissed. 
Given that these stations selected their mask filter level without 
knowing whether this equipment would be reimbursed, the Commission 
finds that their selection of a particular level is unlikely to have 
been influenced by the availability of reimbursement.
    26. Several commenters support reimbursement for the costs of full 
service mask filters, and only one, NTA, objects. Although NTA opposes 
reimbursement for full service mask filters on the grounds that ``there 
is no justification for a station adopting a particular filter beyond 
its own needs, and receiving government reimbursement [for that 
expense],'' the Commission finds, given the timing of their selection 
as discussed above, that there was no incentive for a station to 
specify a level of filter that is not appropriate for its needs. 
Moreover, the Commission notes, that as a practical matter, unless 
there are adjacent channel facilities in a displaced LPTV/translator 
station's vicinity, specifying a full service mask rather than a simple 
or stringent mask confers no benefit to the station. Use of a full 
service mask permits a displaced station to choose a channel that would 
not otherwise be available because a simple or stringent mask would not 
adequately confine out-of-channel emissions to operations on adjacent 
channels. For these reasons, the Commission believes that its approach 
of reimbursing the mask filter that was specified in the displacement 
applications is a reasonable one.
    27. Translator Microwave/STL Facilities. The Mohave County Board of 
Supervisors (Mohave County) filed comments describing how the repacking 
of the television band has impacted its network of translators in 
western Arizona, including modifications to existing terrestrial 
microwave facilities to allow a displaced translator station to 
continue to feed its signal on its new channel to another translator 
station. Mohave County requests that the Commission reimburse such 
costs. The Commission believes that Mohave County's request is best 
addressed on a case-by-case basis in the context of a request for 
reimbursement. Further, LPTV Coalition maintains that displaced LPTV 
stations may need to replace studio transmitter links (STLs) and 
requests that the Commission reimburse such costs. The Commission finds 
that there may be some instances where reimbursement for STLs may be 
appropriate, such as where LPTV stations incur expenses for STL 
adjustments associated with a change in location resulting from the 
reorganization of broadcast television spectrum. The Fund Administrator 
and the Media Bureau will review the specific circumstances presented 
by any entity claiming reimbursement for microwave facilities or STLs 
to determine whether they are eligible for reimbursement under the 
statute.
    28. Displacement Caused by Modification Filings. In the NPRM the 
Commission noted that, while the Commission's reorganization of 
television spectrum under Section 1452(b) of the Spectrum Act was 
completed with the issuance of the Closing and Channel Reassignment PN, 
the Commission also afforded reassigned stations the opportunity to

[[Page 11238]]

file applications for alternate channels or expanded facilities during 
two filing windows that ended on September 15, 2017, and November 2, 
2017. While applications filed by reassigned stations during the two 
filing windows were not required under Section 1452(b) of the Spectrum 
Act, they may have resulted in displacement of LPTV/translator stations 
making those stations eligible to file applications in the Special 
Displacement Window. Accordingly, the Commission sought comment on 
whether the REA's requirement that the Commission reimburse costs 
reasonably incurred ``as a result of the reorganization of broadcast 
television spectrum'' extends to include costs incurred by LPTV/
translator stations that were displaced solely due to modifications 
made by full power and Class A facilities as a result of receiving 
authorizations through these two filing windows. The Commission agrees 
with NAB that ``these filing windows were authorized by the Commission 
in its incentive auction framework order and plainly constitute part of 
the repack.'' Thus, it concludes that reimbursing LPTV/translator 
stations for such costs is consistent with the REA. No commenter 
opposes this proposal.
Equipment Upgrades and Reuse of Existing Equipment
    29. The Commission adopts the NPRM's proposal with respect to 
equipment upgrades and reuse of existing equipment. In implementing the 
Spectrum Act's reimbursement provisions, the Commission concluded that 
it would not reimburse stations for new, optional features in equipment 
that are not already present in the equipment being replaced, and the 
Commission proposed to apply the same approach to eligible LPTV/
translator stations. In addition, consistent with its approach for full 
power and Class A stations, the Commission proposed a similar 
requirement that displaced LPTV/translator stations reuse their own 
equipment to the extent possible, and that displaced LPTV/translator 
stations seeking reimbursement provide a justification why it is 
reasonable to purchase new equipment rather than reuse existing 
equipment.
    30. Consistent with the approach the Commission has taken when 
reimbursing full power and Class A stations, the Commission will not 
provide reimbursement for optional features beyond those already 
present in the station's facilities. NAB and HC2 support the proposal 
not to reimburse stations for new or optional features that are not 
already present in the equipment being replaced, but also note that 
``technological advances may mean some features are now standard in 
equipment and some upgrades may thus be inevitable.'' The Commission 
acknowledges that some stations may not be able to replace older, 
legacy equipment with equipment that is precisely comparable in 
functionality because of advances in technology. If the cost to replace 
certain equipment is reasonably incurred so that an LPTV/translator 
station can construct its granted Special Displacement Window 
construction permit facility, the Commission will reimburse for the 
cost of that equipment, recognizing that the equipment may include some 
improved functionality.
    31. With respect to equipment repurposing, consistent with the 
approach the Commission has taken in reimbursing full power and Class A 
stations, LPTV/translators should reuse their own equipment to the 
extent possible and, if seeking reimbursement for new equipment, 
provide a justification when submitting their cost estimates as to why 
the cost to purchase new equipment rather than modify their current 
equipment to conform to their displacement construction permit is 
``reasonably incurred.'' LPTV Coalition asserts that ``[m]any in the 
LPTV industry did not reinvest[ ] into new equipment if they knew they 
were going to be displaced by the auction [and] many of the 
transmission systems are in need of replacement and upgrading. 
Upgrading when they build out their new construction permits should be 
allowed as much as possible.'' The Commission disagrees. The Commission 
does not believe that the cost for new equipment can be considered 
``reasonably incurred'' if the station already has a functional piece 
of equipment it can use rather than replace. The Commission also notes 
that almost 80 percent of LPTV/translator stations transitioned from 
analog to digital, mostly since the end of the DTV transition in 2009, 
and it has no basis for concluding that a significant amount of this 
relatively new digital equipment is in need of replacement.
Interim Facilities
    32. The Commission will consider on a case-by-case basis whether 
expenses for interim facilities are eligible for reimbursement under 
the REA for LPTV/translator stations. The Commission acknowledges that 
in the Incentive Auction R&O, the Commission concluded that stations 
that are assigned a new channel in the incentive auction repacking 
process may need to use interim facilities to avoid prolonged periods 
off the air during the transition and decided to reimburse full power 
and Class A stations for such facilities under the Spectrum Act 
reimbursement provisions. Because of their lower operating power and 
the fact that the engineering work that is involved in changing 
channels is more limited than for full power television stations, the 
Commission stated in the NPRM that it did not believe that LPTV/
translator stations will need to construct interim facilities as part 
of the displacement process and the Commission proposed that such 
expenses should not be eligible for reimbursement under the REA for 
LPTV/translator stations. However, LPTV Coalition contends that LPTV 
stations may need to implement interim facilities in certain 
circumstances. While the Commission thinks it is unlikely that LPTV 
stations will need interim facilities, it will consider the facts 
presented on a case-by-case basis.
Lost Revenues
    33. The REA, like the 2012 Spectrum Act, explicitly prohibits 
reimbursement of LPTV/translator stations for ``lost revenues.'' As 
proposed in the NPRM, the Commission adopts the same definition it 
adopted in the Incentive Auction R&O and that it apply to full power 
and Class A stations in the existing reimbursement program for ``lost 
revenues.'' Specifically, it defines ``lost revenues'' as those ``that 
a station loses as a direct or ancillary result of the reorganization 
of broadcast television spectrum, including the repacking process and 
the reallocation of UHF spectrum in conjunction with the incentive 
auction.'' Under this definition, for example, it will not reimburse a 
station's loss of advertising revenues while it is off the air during 
its displacement, or for refunds a station is required to make to 
advertisers for payments for airtime as a result of being off the air 
in order to implement a channel change. The Commission agrees with LPTV 
Coalition that it simply is not practical to permit reimbursement for 
lost revenues and also believe that allowing reimbursement for these 
expenses would unduly burden the Reimbursement Fund.
Costs To Resolve Mutually Exclusive Applications
    34. The Commission adopts the NPRM's proposals to prohibit 
reimbursement of costs associated with resolving mutually exclusive 
applications. The REA provides that ``[t]he Commission may not make 
reimbursement . . . for costs incurred to resolve mutually exclusive 
applications, including costs incurred in any auction

[[Page 11239]]

of available channels.'' Applications filed during the Special 
Displacement Window that remain mutually exclusive will be resolved 
through competitive bidding. The Commission interprets the prohibition 
against reimbursing for ``costs incurred in any auction'' to mean that 
the Commission may not reimburse LPTV/translator station auction 
bidders under the REA for the costs related to filing an auction 
application associated with a competitive bidding process, 
participating in such an auction, and winning bid payments. The 
Commission also concludes that costs associated with the Settlement 
Window to resolve mutual exclusivity will not be reimbursed under the 
REA. Thus, the Commission will not reimburse stations for costs in 
resolving mutual exclusivity, including engineering studies and 
preparing application amendments, or the payment of other stations' 
expenses as part of a settlement. However, the Commission will permit 
reimbursement for certain engineering costs reasonably incurred in 
constructing the facilities resulting from settlement and coordination 
between mutually exclusive applicants. For example, as suggested by 
LPTV Coalition, the cost for a channel study used to settle a mutually 
exclusive group may be reimbursed if it can be demonstrated that the 
same channel study is subsequently used to support an amendment to a 
displacement application.
Stations With Other Sources of Funding
    35. The Commission finds that stations that receive or have 
received reimbursement of certain expenses from sources of funding 
other than the Reimbursement Fund are not eligible to receive 
reimbursement for those expenses from the Reimbursement Fund. Section 
511(k)(3)(A) of the REA specifies that Class A stations that receive 
reimbursement from ``any other source'' may not receive reimbursement 
under the REA. While the REA did not explicitly set forth an identical 
requirement for LPTV/translator stations, the Commission believes that 
the statute as reasonably interpreted extends a similar prohibition to 
LPTV/translator stations. The REA requires the Commission to 
``reimburse costs reasonably incurred.'' Congress did not define these 
terms in the REA, the Spectrum Act, or the Act. The dictionary 
definition of the term ``reimburse'' is to ``pay back to someone: 
repay''; ``to make restoration or payment of an equivalent to.'' For 
stations that are reimbursed by a third party, there is nothing for the 
Commission to ``pay back'' or for which to ``make restoration'' because 
the stations have already been made whole. Indeed, as a practical 
matter, monies from the Reimbursement Fund would be used to reimburse 
T-Mobile, which does not qualify as an entity eligible for 
reimbursement under the REA.
    36. NAB and Class A Commenters agree that stations that have 
already received, or will receive, funding from other sources should 
not be eligible for reimbursement. T-Mobile disagrees, arguing that ``a 
cost that is reimbursed by another source of funding is still a `cost . 
. . incurred' by the station under the statute, given that a station 
must first incur such costs before seeking reimbursements from third 
parties.'' LPTV Coalition likewise contends that the Commission should 
reimburse stations pursuant to the REA even if they have received 
funding from other sources. The Commission disagrees. Those commenters' 
position ignores the fact that the station will be made whole for 
certain expenditures through reimbursement from another source of 
funding. Such an approach could potentially result in windfall payments 
to LPTV/translator stations above the costs they reasonably incurred to 
relocate from one channel to another or otherwise modify their 
facilities, and at a minimum would require the Commission to 
investigate the private contractual or other relationships between 
parties to assure that duplicate payments are not made. The Commission 
believes it far more likely that Congress did not intend to permit such 
obvious windfalls. In any case, the Commission finds it axiomatic that 
sound administration of federal funds requires that no expense is 
eligible for reimbursement if the same expense is funded from another 
source. Such a conclusion could subject the Reimbursement Fund to 
waste, fraud, and abuse.
    37. Consistent with its holding above that the REA prohibits 
duplicative payments, the Commission will not reimburse displaced 
stations for costs for which they have already received reimbursement 
funding from T-Mobile's Supplemental Reimbursement Program or its 
translator reimbursement grant program administered through PBS. In the 
NPRM, the Commission sought comment on whether displaced LPTV/
translator stations that have received reimbursement from T-Mobile for 
a particular expense should receive reimbursement for that expense 
pursuant to Section 511(k)(1). In its comments, T-Mobile argues that 
stations that receive funding from third parties should be eligible for 
reimbursement under the REA after making a certification to prevent the 
double recovery of their relocation expenses. The Commission rejects 
this argument and agrees with NAB that the Commission ``should not 
effectively reimburse'' third parties that already made a voluntary 
commitment to fund the relocation of displaced LPTV/translator stations 
before they were aware that any federal source of funding would be 
available through the REA. The Commission should not, after those 
business arrangements are established, stand as an insurer of T-
Mobile's commitment. There is no question that entities that are not 
displaced stations, such as T-Mobile and PBS, are not eligible to 
receive direct reimbursement from the Reimbursement Fund because they 
do not meet the eligibility requirements under the REA. While T-Mobile 
proposes that stations certify that they will use their REA 
reimbursement proceeds to promptly reimburse third parties such as T-
Mobile and PBS, the Commission does not believe that such certification 
would satisfy the Commission's obligation to ensure that the limited 
fund is administered only to reimburse costs that are not otherwise 
subject to reimbursement from other sources. Furthermore, T-Mobile does 
not propose a mechanism for the Commission to audit and ensure that the 
REA reimbursement funding is in fact transferred between these private 
parties. The Commission believes that such a certification could 
require the Commission staff to act as an auditor for the two 
reimbursement programs established by T-Mobile at both risk and expense 
to the government. The Commission should not insert itself into such 
private commercial transactions absent clear statutory direction that 
it does not find in the REA. The Commission finds, however, that if T-
Mobile's reimbursement is less than the amount for which the station 
would be eligible under the reimbursement rules and procedures adopted 
in this proceeding, the station may request reimbursement from the 
Reimbursement Fund for any shortfall.
    38. The Commission requires displaced stations to certify on their 
reimbursement submissions that they have not received nor do they 
expect to receive reimbursement from other sources for costs for which 
they are requesting reimbursement from the REA, and it also requires 
stations to first seek reimbursement from other sources before seeking 
reimbursement of any potential shortfall under the REA. This includes 
but is not limited to sources of funding such as insurance or existing

[[Page 11240]]

state grants. This is consistent with the approach taken in connection 
with reimbursement of full power and Class A stations, where, for 
example, it has required stations to first seek reimbursement from an 
insurer before seeking reimbursement from the Commission. NTA asks that 
the Commission clarify that it will reimburse state or municipal 
government-owned translators where the reimbursement funds will be 
returned to the governmental entity. According to NTA, ``Congress did 
not intend to penalize states and local governments that maintain 
translators,'' and reimbursing these government-owned translators 
should not be considered a duplicative payment. The Commission agrees 
with NTA and clarify that its decision on duplicative payments does not 
implicate the eligibility of translators that are licensed to 
governmental entities. Such translators are eligible for reimbursement, 
just as any other eligible translator station that files in the Special 
Displacement Window and incurs costs due to its displacement.

FM Broadcast Stations--Eligibility and Expenses

Stations Eligible for Reimbursement

    39. The Commission finds that pursuant to the REA, FM stations are 
eligible for reimbursement from the Reimbursement Fund if they satisfy 
the criteria described below.
FM Broadcast Stations and FM Translator Stations
    40. The Commission adopts the tentative conclusion in the NPRM that 
``FM broadcast stations'' includes both full-service FM stations and FM 
translator stations. NAB supports this tentative conclusion, and no 
commenter disputes it. Congress defined ``FM broadcast stations'' in 
the REA by referencing Sec. Sec.  73.310 and 74.1201 of the 
Commission's rules. Section 73.310 defines an FM broadcast station as 
``[a] station employing frequency modulation in the FM broadcast band 
and licensed primarily for the transmission of radiotelephone emissions 
intended to be received by the general public.'' Additionally, Congress 
specifically stated that FM translator stations as defined in Sec.  
74.1201 of the Commission's rules would be eligible for reimbursement.
    41. The Commission also concludes that low-power FM (LPFM) stations 
qualify for reimbursement. In the NPRM, the Commission sought comment 
on whether LPFM stations, which were not specifically referenced in the 
REA, should nonetheless be considered ``FM broadcast stations'' for 
reimbursement purposes. It noted that such stations meet the criteria 
for ``FM broadcast station'' set forth in Sec.  73.310 of the rules and 
are licensed under part 73 of the rules like full-service FM stations. 
Both NAB and REC are in favor of reimbursement eligibility for LPFM 
stations, and no commenter opposes this interpretation. REC argues that 
even though LPFM stations are secondary services, because they 
originate programming, have Emergency Alert System equipment, and hold 
responsibilities as broadcasters, they should be considered FM 
broadcast stations for reimbursement purposes. For all these reasons 
the Commission concludes that LPFM stations qualify for reimbursement.
Licensed and Transmitting at Time of Repack
    42. For LPTV/translator stations, as noted above, the REA defines 
eligibility by reference to licensing and transmitting prior to a 
specific date (April 13, 2017). It includes no such specific reference 
in addressing FM stations. The Commission adopts its tentative 
conclusion that to be eligible for reimbursement under the REA, an FM 
station must have been licensed and transmitting on this same date, 
using facilities impacted by a repacked television station. The 
Commission also adopts its tentative conclusion that only those costs 
associated with the impact at that location will be considered 
eligible. It believes it is necessary and appropriate to impose some 
reasonable standards on the eligibility of stations to be reimbursed 
from the Reimbursement Fund, and it concludes that it should place the 
same limitation on FM stations that is applied to LPTV/translator 
stations. As explained in the NPRM, the Commission chose this date 
because it is the date on which reverse auction winners and the 
television stations subject to the repack were identified in the 
Closing and Channel Reassignment PN, and it tentatively concluded that 
any FM station that began operating on a facility or at a location 
impacted by a repacked television station after that date voluntarily 
assumed the risk of any potential disruption of service to the FM 
station. NAB, the only commenter to address this issue, agrees with 
this rationale and supports using a ``licensed and transmitting on 
April 13, 2017'' standard for eligibility of FM stations. Thus, the 
Commission adopts this tentative conclusion and finds that any costs 
incurred by FM stations that undertook such a risk are not ``reasonably 
incurred'' under the statutory standard and therefore are not eligible 
for reimbursement under the REA.
    43. The Commission affirms its conclusion that there must be a 
causal link between the facilities for which reimbursement is sought 
and repack-related work to a full power or Class A television station. 
The REA requires reimbursement ``to reasonably minimize disruption of 
service as a result of the reorganization of broadcast television 
spectrum under [47 U.S.C. 1452(b)].'' In the NPRM, the Commission 
tentatively concluded that an FM station can experience a service 
disruption ``as a result of the reorganization of broadcast television 
spectrum under [47 U.S.C. 1452(b)]'' either because a full power or 
Class A television station has been reassigned to a new channel in the 
Closing and Channel Reassignment PN, or because a full power or Class A 
television station relinquished spectrum usage rights in the reverse 
auction. In either case, modification of the full power or Class A 
television station may impact the FM station. The Commission 
interpreted the statutory language to require a causal link between the 
facilities being reimbursed and the activities associated with the 
station relinquishing spectrum rights or the repacked full power or 
Class A television station, and likewise interpreted this provision to 
mean that only the FM broadcast facilities directly impacted by the 
repacked television station would be eligible for reimbursement. The 
Commission believes that this interpretation of the REA is consistent 
with Congress's provision of limited funds for FM facility 
reimbursement. NAB agrees that the clear intent of the REA was to 
require a causal link between work done because of repacking or channel 
relinquishment and expenses for which an FM station seeks 
reimbursement, and no commenter disputes its interpretation.
    44. Consistent with its finding with respect to LPTV/translator 
stations, the Commission concludes that reimbursing FM stations for 
costs incurred due to television station modifications resulting from 
authorizations received through the alternate channel/expanded 
facilities filing windows is consistent with the REA. The Commission 
sought comment on whether the REA's requirement that it reimburse costs 
incurred by FM stations to ``reasonably minimize disruption of service 
as a result of the reorganization of broadcast television spectrum 
under [47 U.S.C. 1452(b)]'' extends to costs incurred by FM stations 
solely due to modifications

[[Page 11241]]

made by full power and Class A facilities as a result of receiving 
authorizations through the two alternate channel/expanded facilities 
filing windows. NAB urges the Commission to permit reimbursement under 
the REA for work done because of modifications as a result of receiving 
authorizations through the alternate channel/expanded facilities filing 
windows. The Commission agrees with NAB that ``these filing windows, 
authorized by the Commission in its incentive auction framework order, 
plainly constitute part of the repack.''
Categories of Eligible FM Stations
    45. In the NPRM, the Commission proposed three categories of 
stations that the Commission anticipated will encounter any disruption 
of service as a result of the reorganization of broadcast television 
spectrum such that they would be eligible for reimbursement under the 
REA. The Commission adopts its proposal to assign affected FM stations 
to the three categories of service disruption set forth below, and to 
allow reimbursement to FM stations in these three categories:
    46. Category (1)--Stations Forced to Relocate Permanently. The 
Commission proposed that this eligibility category include FM stations 
required either to vacate their towers, and which therefore incur costs 
for alternative facilities at a different site, or to relocate 
permanently their antennas to a different level of their current 
towers.
    47. Category (2)--Stations Forced to Temporarily Dismantle 
Equipment or Make Other Changes Not Requiring Commission Approval. The 
Commission proposed that this eligibility category include FM stations 
required temporarily to dismount or disassemble equipment, most likely 
antennas, in order to accommodate work on a television antenna or a 
tower. The Commission also proposed that this category include FM 
stations required to physically move their transmitter to accommodate 
new television transmission equipment, and also include other types of 
necessary equipment modifications that do not require Commission 
approval.
    48. Category (3)--Stations Forced to Temporarily Reduce Power or 
Cease Transmission on Their Primary Facility to Accommodate Antenna or 
Tower Modifications. The Commission proposed that this eligibility 
category would include those FM stations that are required to reduce 
power or go off the air to protect workers making modifications to 
television facilities on a tower from RF exposure. FM stations in other 
eligibility categories could also qualify as Category (3) stations if 
they otherwise meet the reimbursement requirements.
    49. As noted in the NPRM, the Commission believes that reimbursing 
FM stations for the types of service disruptions described in these 
categories is consistent with its statutory mandate to reimburse FM 
stations for ``costs . . . for facilities necessary for such station to 
reasonably minimize disruption of service as a result of the 
reorganization of broadcast television spectrum.'' NAB ``agrees that 
these three categories should cover the universe of affected 
stations,'' and no commenter disagrees with the categorization of FM 
stations proposed above or suggests additional categories.
    50. The Commission also adopts its tentative conclusion that FM 
stations will be required to certify that they have not received or do 
not expect to receive payment from other sources for interim facilities 
constructed or leased as a result of repack-related service 
disruptions. Section 511(l)(1)(C) of the REA specifies that an FM 
station that has received payment for ``interim facilities'' from 
either a television station that was reimbursed under the Spectrum Act 
or ``from any other source'' may not receive ``any reimbursements'' 
under the REA. Based on the statutory language, the Commission 
concludes that any FM station that has received such payment for 
``interim facilities,'' is ineligible for any reimbursement under the 
REA. Commenters agree with these conclusions. As discussed above, the 
Commission believes the government should not act as an insurer with 
regard to voluntary reimbursements made by third parties.
Expenses Eligible for Reimbursement
    51. In the NPRM, the Commission observed that the REA requires the 
Commission to provide reimbursement for ``costs reasonably incurred by 
an FM broadcast station for facilities necessary for such station to 
reasonably minimize disruption of service as a result of the 
reorganization of broadcast television spectrum.'' The Commission 
tentatively concluded that tying reimbursement to a requirement for 
some level of disruption of service to eligible FM stations is 
reasonable, and noted that the public interest requires that the 
Commission seek to maximize the limited funds available for all 
facilities to address the most significant service disruptions to 
ensure that the most needed facilities are fully funded. The Commission 
thus sought comment on how to define what costs are ``reasonably 
incurred'' and on how to interpret the phrase ``to reasonably minimize 
disruption of service'' as contemplated by the REA, and proposed an 
approach for prioritization of reimbursement to FM stations. Below the 
Commission describes expenses that the Commission find are eligible for 
reimbursement pursuant to the REA.
Costs Reasonably Incurred
    52. First, as proposed in the NPRM, the Commission finds that 
eligible costs for Category (1) and Category (2) stations are similar 
to eligible costs for full power and Class A stations in the repack, 
and therefore should be reimbursed in a similar manner. No commenter 
took issue with this proposal, and the Commission therefore adopt it as 
discussed in greater detail below. As a result, if sufficient funds are 
available in the Reimbursement Fund to fully reimburse FM stations, 
Category (1) and Category (2) stations should be eligible for 
reimbursement for up to 100 percent of eligible costs similar to the 
reimbursements provided to impacted full power and Class A stations.
    53. Second, the Commission declines to adopt its proposal that 
reimbursement for Category (3) stations should be subject to a 
graduated priority system based on the significance and duration of 
service disruption. No commenter supports this proposal. Instead, as 
discussed in more detail below, the Commission concludes that if 
sufficient funds are available in the Reimbursement Fund to fully 
reimburse FM stations, Category (3) stations that experience more than 
a de minimis level of service disruption will be eligible for 
reimbursement for up to 100 percent of eligible costs.
Replacing or Restoring Facilities--Category (1) and (2) Stations
    54. Category (1) Stations. The Commission concludes that Category 
(1) stations are eligible for reimbursement of up to 100 percent of 
eligible costs. In the NPRM, the Commission stated its belief that 
reimbursement of costs associated with Category (1) FM stations should 
be based on a standard similar to that developed for the existing 
reimbursement program for full power and Class A stations because the 
nature of the relocation of the FM station and types of costs incurred 
are similar. As such, the Commission noted that the goal for Category 
(1) stations should be to rebuild their facilities to reasonably 
replicate the station's coverage area and population served, similar to 
the standard applicable to full power and Class A stations. The 
Commission also stated that Category (1) stations should be eligible 
for reimbursement for costs

[[Page 11242]]

similar to full power and Class A stations to move and reconstruct the 
current facilities at a new site or tower location, including costs of 
equipment, professional services such as engineering, and tower and 
construction work. With no opposition from commenters, the Commission 
thus affirms its conclusions and find that, if sufficient funds are 
available in the Reimbursement Fund to fully reimburse FM stations, 
Category (1) stations are eligible for reimbursement for up to 100 
percent of eligible costs similar to the reimbursements provided to 
impacted full power and Class A stations. The Commission continues to 
believe that only a very small number of stations are likely to be 
included in this category, and therefore the Commission does not 
believe the reimbursement of these stations is likely to constitute a 
significant portion of payments to FM stations from the Reimbursement 
Fund.
    55. The Commission further adopts its proposals with respect to 
specific types of reimbursable equipment costs for Category (1) 
stations. Specifically, the Commission finds that examples of 
reimbursable equipment costs that could be reasonably incurred include 
transmitters, antennas, coaxial cable or wave guides, and associated 
equipment needed to reasonably replicate the service being lost. The 
Commission also finds that existing equipment should be reused as 
appropriate and that, to the extent that existing equipment cannot be 
reused, new equipment be reimbursable if needed to reasonably replicate 
service and coverage area. Additionally, the Commission finds that the 
costs of engineering to determine what technical facilities are needed 
to replace existing service at a new site should be considered 
reimbursable expenses, as well as transportation costs of physically 
moving equipment to a new site or new location on a tower and any 
engineering costs associated with the move. Finally, the Commission 
adopts its proposal not to reimburse FM stations for equipment that is 
used solely to emit transmissions that are not ``radiotelephone 
emissions intended to be received by the general public,'' such as 
Traffic Message Channels and digital metadata. No commenter disagrees 
with these proposals.
    56. The Commission finds that expenses related to STLs are eligible 
for reimbursement in certain circumstances. In the NPRM, the Commission 
initially proposed not to reimburse FM stations for the costs of STLs 
and related equipment. NAB urges the Commission to permit the 
reimbursement of STL expenses in light of the fact that, unlike 
television stations, FM stations will not change channels but will, in 
some cases, be forced to change locations, necessitating readjustment 
of STL facilities. Although the Commission concludes that stations 
utilizing microwave STL links should ordinarily be able to reuse their 
transmission and reception equipment and antennas, the Commission finds 
that there may be certain limited instances where reimbursement may be 
appropriate, such as where FM stations incur expenses due to a change 
in the FM station's antenna location. The Commission directs the Media 
Bureau to reimburse reasonably incurred expenses on a showing that 
existing STL facilities could not be adapted for use at the new tower 
site and that their unsuitability is due to the specific relocation of 
the antenna and not the repack generally. The Commission distinguishes 
this situation from the use of STLs in the context of full power and 
Class A services. In those situations, the issue addressed by the 
Commission in the Incentive Auction R&O, and reaffirmed herein, is 
whether a station may be reimbursed for non-comparable equipment in 
lieu of a displaced secondary service that is not itself eligible for 
reimbursement, whereas here the Commission anticipates replacement of 
existing equipment due to a location change.
    57. Category (2) Stations. The Commission concludes that Category 
(2) stations are eligible for reimbursement of up to 100 percent of 
eligible costs. In the NPRM, the Commission stated its belief that it 
is also in the public interest to develop a similar standard for 
eligible expenses for reimbursement of Category (2) stations. The 
Commission noted that Category (2) stations could reasonably incur 
costs that are related to their need to temporarily dismantle equipment 
or modify their physical facilities, for example, costs of equipment, 
professional services such as engineering, and tower and construction 
work, similar to the costs incurred by full power and Class A stations. 
Additionally, the Commission observed that, similar to Category (1), 
the service disruptions associated with these costs are likely to be 
significant in magnitude, but the number of stations incurring such 
costs is likely to be very small, and payments to such stations from 
the Reimbursement Fund will likewise be relatively small compared to 
total reimbursements for FM stations. With no opposition from 
commenters, the Commission thus affirms these conclusions and adopt its 
proposal that, if sufficient funds are available in the Reimbursement 
Fund to fully reimburse FM stations, Category (2) stations should be 
reimbursed for up to 100 percent of eligible costs similar to full 
power and Class A stations.
Interim Facilities--Category (3) Stations
    58. The Commission adopts its proposal that Category (3) stations 
be reimbursed for the cost of constructing new auxiliary facilities or 
upgrading existing auxiliary facilities to maximize signal coverage. 
The Commission observed in the NPRM that, in the full power and Class A 
reimbursement program, the costs of interim facilities are reimbursed 
in the same manner as other costs incurred for a station to change 
channels, and the Commission stated that the Commission would apply the 
same approach to FM stations. This would permit FM stations to continue 
broadcasting while their primary facilities are off the air due to the 
need to protect tower personnel working on modifications related to the 
reorganization of broadcast television spectrum. Reimbursable costs 
could include costs of equipment, professional services such as 
engineering, and tower and construction work. No commenter disagrees 
with its proposal.
    59. The Commission adopts its tentative conclusion that it is 
reasonable for there to be some temporary disruption of FM service to 
permit construction work or maintenance on a collocated, adjacent, or 
nearby station. FM stations regularly power down or remain silent for 
temporary periods to accommodate tower or antenna work and transmitter 
maintenance, and because of this the Commission stated that it is 
appropriate to reimburse costs for interim facilities only if they are 
needed to avoid service interruptions that would otherwise exceed 
ordinary construction or maintenance requirements. The Commission 
further adopts its tentative conclusion that operating from interim 
facilities does not require service that is identical to the station's 
primary service, as indicated by the REA's requirement that the 
Commission considers what expenses ``reasonably minimize'' disruption 
of service, rather than the Spectrum Act's mandate to reimburse 
expenses resulting from a channel change. There was no opposition in 
the record to these particular conclusions.
    60. However, the Commission rejects the proposal in the NPRM to 
apply a graduated priority system to reimburse Category (3) stations 
that would have linked the length of service disruption avoided to the 
level of reimbursement eligibility. In the NPRM, the Commission 
tentatively concluded that Category (3) FM stations should qualify

[[Page 11243]]

for maximum reimbursement on a graduated scale, with those stations off 
the air longest qualifying for the greatest percentage of 
reimbursement, because the Commission believed it would preserve finite 
funds for the most significant instances of service disruption. NAB and 
NPR strenuously oppose this proposal and dispute its tentative 
conclusion that the longer the lost airtime, the more service 
disruption and, thus, the greater justification for reimbursement for 
the construction of permanent auxiliary facilities. NAB labels the 
scaled reimbursement proposal as arbitrary and capricious, while NPR 
asserts that many stations, especially noncommercial educational (NCE) 
stations, would forego installation of interim facilities if reimbursed 
for only half the cost. The Commission shares the concerns expressed 
regarding this proposal, and the Commission does not adopt it.
    61. Instead, the Commission will allow all Category (3) stations 
whose service is subject to more than a reasonably minimal disruption, 
as defined below, for more than a de minimis amount of time (discussed 
in paragraph 80 below) to be reimbursed for their reasonably incurred 
costs to the same extent as Category (1) and (2) stations. If the $50 
million fiscal year 2018 allocation for FM stations should prove 
insufficient to fully reimburse all categories of FM station claimants, 
then the Media Bureau will allocate funds in the same manner among all 
FM claimants in all three categories, for instance by allocating the 
same percentage of funds to stations in all three categories. Although 
the Commission has agreed with NAB and NPR that funds for reimbursement 
may exceed the $50 million specifically earmarked for FM stations in 
fiscal year 2018, it is too soon to know whether any additional funds 
will be available or be sufficient to provide 100 percent reimbursement 
to all FM stations, particularly given the prioritization of full power 
and Class A stations and MVPDs with respect to fiscal year 2019 funds. 
Should additional fiscal year 2019 funds be available for reimbursement 
of FM stations, the Commission directs the Media Bureau to distribute 
those funds in the same manner among all FM station categories.
    62. NPR asks the Commission to clarify that those FM stations able 
to seek reimbursement for interim facilities should not be limited to 
stations forced to go off air with their regular facilities, but should 
also include stations forced to reduce power to the point that they 
cannot cover 80 percent of their normal covered area or population. The 
Commission concurs with NPR that reimbursable interim facilities need 
not be limited to FM stations forced to go off air completely during 
repack-related work. In determining what would constitute ``reasonably 
minimiz[ing] disruption of service'' with respect to Category (3) 
stations, the Commission observed in the NPRM that transmissions from 
interim facilities would not exactly replicate the areas or populations 
covered from the licensed transmitter site. The Commission therefore 
proposed that 80 percent of an FM station's coverage area or covered 
population should be replicated by the interim facility in order to 
constitute substantial interim coverage meeting the ``reasonably 
minimiz[ing] disruption of service'' standard. This was based on 
Commission precedent in other contexts holding that, when a rule 
requires provision of a certain strength signal to an entire community, 
provision of that signal strength to 80 percent or more of either the 
area or the population of the community is considered to be substantial 
compliance with the rule. NAB, in its comments, prefers a standard 
under which only a station that can cover both 80 percent of its full-
service covered population and 80 percent of its full-service covered 
area would be deemed to have a minimal disruption of service and, thus, 
be ineligible for reimbursement. Under NAB's modification to its 
proposal, any station unable to achieve either coverage standard would 
be eligible to be reimbursed for interim facilities.
    63. The Commission is convinced by NAB that if an FM station that 
must reduce power to accommodate repack work can still achieve, from 
its primary facility or an existing auxiliary facility, both 80 percent 
or more of its normal population coverage and 80 percent or more of its 
normal area coverage, its service will be considered to be a reasonably 
minimal disruption of its service, and therefore such a station will 
not be deemed eligible for reimbursement to construct interim 
facilities. Thus, an FM station that would lose over 20 percent of 
either its normal covered population or its normal coverage area as a 
result of repack-related work will be eligible for reimbursement to 
construct or improve interim facilities to achieve both coverage 
benchmarks. The Commission is persuaded by NAB's argument that radio is 
in large part an out-of-home medium that relies on mobile listeners, 
and that covered population does not always accurately represent a 
radio station's listenership, especially during morning and evening 
``drive time'' periods. The Commission therefore believes that NAB's 
modification to its proposal more fully takes into account the adverse 
effects on an FM station's service caused by repack-related tower work, 
and the Commission therefore modify its proposal as suggested by NAB.
    64. When evaluating the sufficiency of interim facilities, the 
Commission is similarly persuaded that its original proposal to use 
coverage benchmarks, that is, to reimburse for the costs of the interim 
facility only if it is able to achieve either 80 percent of the 
station's full-service covered population or 80 percent of its full-
service covered area, is not the most reasonable approach. Both NAB and 
NPR note that there will likely be situations in which an FM 
broadcaster affected by repack work will not have the ability to locate 
an interim site that would achieve 80 percent of the main facility's 
population or area coverage. This could be due to the time available 
for repack-related construction work, lack of suitable sites from which 
to maximize signal coverage, or other factors. Moreover, the Commission 
believes that a temporarily displaced FM broadcaster has the incentive 
to optimize interim service based on coverage area, covered population, 
and availability of auxiliary sites, as well as to minimize its time 
off air or operating with reduced facilities, and that this incentive 
is in line with Congress's expressed desire to minimize FM service 
disruption. The Commission thus expects that an affected licensee will 
attempt to find an interim site that maximizes signal coverage and 
minimizes time off air to the extent possible in the time allotted. The 
Commission therefore does not adopt its proposal to require that the 
interim facility meet a minimum amount of area or population coverage 
in order to qualify for interim facility cost reimbursement. The 
Commission instead will reimburse FM broadcasters forced to construct 
new or improve existing interim facilities during repack work for 
interim facilities that (1) are operating during the time the station's 
main facility is off air or operating at reduced power due to repack-
related construction for a television station, and (2) provide greater 
signal coverage than existing facilities can provide during such 
construction. To demonstrate this, the licensee must submit contour 
maps demonstrating that the interim facility for which reimbursement is 
sought provides both greater population coverage and greater area 
coverage than the powered-down main facility.
    65. Relatedly, in the NPRM, the Commission proposed that the

[[Page 11244]]

Commission will not reimburse for tower lease payments for interim 
facilities except during the period when the repacked television 
station's construction work is actively preventing the FM station from 
broadcasting from its primary facility and not for any period of time 
thereafter. NPR and NAB both seek clarification on this issue. Both 
argue that some owners of towers that are potential interim transmitter 
sites may require minimum lease periods longer than the actual time off 
air or operating with reduced power during repack-related construction, 
and that therefore ``the Commission should provide public radio 
stations with the flexibility and resources they need by allowing 
reimbursement for a range of reasonable temporary tower leasing 
arrangements.'' Neither commenter provides concrete examples of such 
lessors; at most NPR states that ``some public radio stations report'' 
that potential lessors will require such minimum leases. The Commission 
concludes that reimbursing for minimum lease terms beyond the period of 
interim operations necessitated by repack work is not a cost 
``reasonably incurred . . . to reasonably minimize disruption of 
service as a result of the reorganization of broadcast television 
spectrum.'' The Commission seeks to minimize any potential for 
manipulation by, for example, tower owners taking advantage of 
potential tenants' eligibility for REA reimbursement to impose 
unnecessarily expensive and/or lengthy lease terms. The Commission 
therefore adopts its initial conclusion that FM station operators 
should be reimbursed only for the period of interim operations 
necessitated by repack work.
    66. The Commission does clarify, as suggested by NPR, that the 
Commission will reimburse for leasing interim facilities even if they 
are not used continuously during a repack-related construction period. 
NPR notes that given the uncertainties of tower work due to repacking, 
an FM station might not be required to reduce power or go off air for a 
continuous period of time, but might have multiple periods where 
interim operation is necessary, interspersed with periods of 
construction downtime in which the station can operate at full power 
from its primary site. In such instances, given that auxiliary 
facilities do not operate simultaneously with main facilities, the 
Commission will consider the time off air or operating with reduced 
facilities, for which the FM station may claim reimbursement for 
leasing interim facilities, to begin on the first day an FM station 
must reduce power or shut down due to repacking work, and to run until 
the completion of repack-related tower work and the resumption of full-
power operation from the primary site, without deducting any intervals 
during that time period during which the FM station is temporarily able 
to resume normal operation.
    67. Additionally, the Commission refines its proposed definition of 
de minimis disruption of service with regard to interim facilities to 
mean time off air for less than 24 hours, or time off air confined to 
the hours of 12:00 midnight and 5:00 a.m. local time. In the NPRM, the 
Commission proposed to consider de minimis, and thus non-reimbursable, 
any stations forced off air due to repacking work for time periods that 
are (a) less than 24 hours; (b) during the hours of 10:00 p.m. to 6:00 
a.m. local time; or (c) less than five non-peak broadcast hours per 
day. NAB counters that the Commission should consider as de minimis 
only time off air confined to no more than five overnight work periods 
between the hours of 12:00 midnight and 5:00 a.m. The Commission 
continue to believe that a station off the air for less than one day is 
unlikely to undergo the considerable time and expense of securing 
interim facilities for such a short period, and that such an 
interruption in service is consistent with normal station maintenance 
efforts. Although the Commission agrees with NAB's justification for a 
shorter overnight period, the Commission believes that a station that 
must only go off air during the least-listened to hours of the 
broadcast day--between midnight and 5:00 a.m.--has already reasonably 
limited its service disruption, no matter how many days it is off air, 
and thus should not require reimbursement for interim facilities to 
cover those hours. Moreover, the Commission find that NAB presents no 
reasonable justification for limiting the de minimis definition to just 
five overnight periods, and so the Commission adopts as part of its de 
minimis definition time off air, for whatever period of days, limited 
to the hours of 12:00 a.m. to 5:00 a.m. local time. The Commission also 
eliminate the third prong (item (c) above) of its proposed definition. 
While no commenter specifically addressed this prong, the Commission 
finds that the term ``non-peak hours'' could be subject to a variety of 
interpretations and therefore may be difficult to administer.
    68. Although its decision not to adopt the proposed graduated 
reimbursement scale for Category (3) stations reduces the significance 
of the total time an FM station's primary facilities must be off air or 
operating with reduced power, the Commission nevertheless adopts its 
proposal to require an FM station seeking reimbursement to certify the 
amount of time it could not broadcast from its primary facility due to 
construction work on a repacked television station. As noted above, the 
Commission must have a mechanism to evaluate the total time needed to, 
among other things, lease interim facilities. The Commission further 
adopts its proposal that such certifications may be subject to audits, 
data validations, and site visits, as appropriate, to prevent waste, 
fraud, and abuse. The Commission therefore requires a repacked 
television station to provide, upon request, a statement or other 
information regarding the dates that work was done on a tower that 
impacted the FM station.
Channel Change Equipment
    69. In the NPRM, the Commission expressed its expectation that no 
FM station will be forced to change its frequency as a result of the 
reorganization of broadcast television spectrum and, thus, tentatively 
concluded that expenses for retuning or replacing antennas or 
transmitters to accommodate channel changes will not be eligible for 
reimbursement. No commenter disputes its stated expectation, and the 
Commission therefore concludes that expenses for retuning or replacing 
antennas or transmitters for channel changes will not be eligible for 
reimbursement.
Equipment Upgrades and Reuse of Existing Equipment
    70. The Commission adopts its tentative conclusion in the NPRM that 
the full power and Class A comparable facilities reimbursement standard 
cannot be applied in the same manner to FM stations in Categories (1) 
and (2) because the goal is to reasonably replicate the service type 
and area from a different location (Category (1)) or restore service 
using alternate equipment (Category (2)). In some cases, this can be 
accomplished using existing equipment or its equivalent, but in other 
cases this will require modified or differently configured equipment. 
The Commission concludes that Category (1) and (2) stations need not 
necessarily construct comparable facilities in order to be reimbursed, 
but should be reimbursed based on constructing facilities that 
replicate as closely as feasible the signal contours of the facility 
they replace, using existing equipment if possible but new equipment as 
needed.
    71. The Commission also adopts its proposal that, to the extent 
that a

[[Page 11245]]

Category (1) station must construct a new tower, the Commission would 
reimburse tower construction expenses only upon a showing that no space 
is available on other local towers that would enable it to reasonably 
replicate current service. NAB supports this proposal. Even with such a 
showing, the Commission sought comment as to whether and how the 
Commission should discount any reimbursement for tower construction 
costs, given that such ``vertical real estate'' carries with it the 
potential for revenue generation for the FM station, perhaps in 
substantial amounts. NAB opposes the possibility of a discount, 
labeling such revenues as ``wholly speculative'' and stating that any 
such revenues ``could be rivaled by increased operating expenses 
associated with a new tower.'' The Commission believes that, in the 
rare cases in which construction of a new tower is the only way to 
ensure the replacement of an FM station forced to relocate as a result 
of the television station repack, the decision whether to discount any 
reimbursement for tower construction costs should be made on a case-by-
case basis, and the Commission directs the Media Bureau to make these 
determinations.
    72. The Commission proposed to adopt a requirement, similar to that 
applied to full power and Class A stations, that FM stations reuse 
their own equipment to the extent possible rather than acquiring new 
equipment, and to justify why it is reasonable under the circumstances 
to purchase new equipment rather than modifying existing equipment. As 
noted, the Commission does not expect that FM stations will be required 
to change frequencies, so channel-related equipment modifications will 
not be required. Thus, the Commission believes it is reasonable to 
require FM stations seeking reimbursement to provide a justification 
why it is reasonable to purchase new equipment rather than reuse 
existing equipment. No commenter objects to this proposal as applied to 
FM stations, and the Commission adopts this requirement.
    73. Further, the Commission adopts its proposal to follow the 
Commission's determination in the existing reimbursement program that 
the Commission should not reimburse stations for new, optional features 
in equipment that are not already present in the equipment being 
replaced. For example, the Commission would not reimburse an analog-
only FM station to add hybrid digital capability, nor would the 
Commission reimburse an FM station for rule-compliant modifications 
that would expand its service area beyond its current facilities, 
although it could seek reimbursement of costs needed to restore its 
original coverage area. NAB generally supports this policy, but states 
that ``technological advances'' may render previously optional features 
standard, thus making some upgrades ``inevitable.'' As discussed above, 
the Commission acknowledge that some stations may not be able to 
replace older, legacy equipment with precisely comparable equipment due 
to advances in technology. FM stations can seek reimbursement for the 
costs demonstrated to be necessary for constructing facilities that 
replicate as closely as feasible the signal contours of the facility 
they replace, recognizing that the equipment may include some improved 
functionality. The Commission also clarifies, at NAB's request, that 
maintaining an FM station's digital (HD) capability on interim 
facilities will be reimbursable, as long as the station's main 
facilities were broadcasting in HD as of April 13, 2017.
    74. Finally, the Commission adopts its tentative conclusion that FM 
stations that receive or have received reimbursement of expenses from 
sources of funding other than the Reimbursement Fund, such as co-
located television stations and/or tower owners providing reimbursement 
under contractual provisions, will not receive reimbursement for those 
expenses from the Reimbursement Fund. While the REA specifies that an 
FM station that has received reimbursement for ``interim facilities'' 
may not receive any reimbursements under the REA, the Commission 
believes that a similar prohibition should extend to an FM station that 
has received reimbursement from third parties for costs other than 
interim facilities. For stations that are reimbursed by a third party, 
there is nothing for the Commission to reimburse because the stations 
have already been made whole. The Commission also find that a cost that 
is reimbursed by another source of funding is not a ``cost . . . 
incurred'' by the FM station under Section 511(l)(1)(A). NAB supports 
this tentative conclusion and other commenters did not address it. FM 
stations will be required to certify on their reimbursement submissions 
that they have not received or do not expect to receive reimbursement 
from other sources for costs for which they are requesting 
reimbursement from the REA. This is consistent with its treatment of 
LPTV/translator stations, as discussed above. Also, consistent with its 
approach for LPTV/translator stations, the Commission will require that 
FM stations first seek reimbursement from other sources before seeking 
reimbursement of any potential shortfall under the REA.

Lost Revenues

    75. The REA, like the 2012 Spectrum Act, prohibits reimbursement of 
FM stations for ``lost revenues.'' The Commission adopts its proposal 
to define ``lost revenues'' for purposes of reimbursing FM stations 
similar to how the Commission defined it in the Incentive Auction R&O--
specifically, ``revenues that a station loses as a direct or ancillary 
result of the reorganization of broadcast television spectrum, 
including the reverse auction and the repacking process.'' Under this 
definition, for example, the Commission would not reimburse a station's 
loss of advertising revenues while it is off the air implementing 
either replacement or interim facilities, or for refunds a station is 
required to make to advertisers for payments for airtime as a result of 
being off the air in order to implement such a facility change. 
Commenters did not oppose its conclusions regarding lost revenues. 
This, again, is consistent with the definition of ``lost revenues'' 
adopted with regard to LPTV/translator stations, above.

Reimbursement Process

    76. As the Commission stated in the NPRM, its goal is to adopt a 
reimbursement process for the newly eligible entities that is as simple 
and straightforward as possible to minimize both the costs associated 
with reimbursement as well as the burdens on affected parties and the 
Commission. At the same time, the Commission is committed to a process 
that is fair to all eligible entities and that maximizes the funds 
available for reimbursement by avoiding waste, fraud, and abuse.
    77. As discussed below, the Commission adopts a reimbursement 
process for LPTV/translator and FM stations that is substantially 
similar to the process currently being used by the Commission to 
provide reimbursements to full power and Class A stations and MVPDs, 
and will make an effort to simplify the forms and certain processes and 
procedures where appropriate. As the Commission stated in the NPRM, the 
Commission believes that using a process and resources that have proven 
effective and that already are familiar to many of the entities that 
will be seeking reimbursement will help result in a smooth and 
efficient reimbursement process. Several commenters urge the Commission 
to adopt procedures that

[[Page 11246]]

closely mirror those currently in use as they are well-understood by 
broadcasters as well as the consultants and attorneys they employ. At 
the same time, its goal is to create reimbursement forms and processes 
for use by the newly eligible entities that are as streamlined and easy 
to understand as possible to facilitate reimbursement for these 
entities.

Eligibility Certification and Estimated Expenses

    78. As proposed in the NPRM, all newly eligible entities that 
believe they meet the eligibility requirements and intend to request 
reimbursement for eligible expenses must file a certification 
indicating that they intend to request reimbursement funds and meet the 
criteria for eligibility (Eligibility Certification), as well as a form 
that provides information on their existing broadcasting equipment and 
estimated costs eligible for reimbursement (Reimbursement Form). The 
Reimbursement Form will be a modified version of the reimbursement form 
used for full power and Class A stations in the existing program (FCC 
Form 2100, Schedule 399). The Media Bureau will release the form(s) and 
announce the deadline by which LPTV/translator and FM entities that 
intend to request reimbursement must file the Eligibility Certification 
and Reimbursement Form.
    79. Entities must certify on the Eligibility Certification, inter 
alia, that they meet the eligibility criteria adopted in this 
proceeding and provide documentation or other evidence to support their 
certification. With respect to LPTV/translator stations, the Commission 
adopts its proposal that these stations must certify compliance with 
the minimum operating requirement adopted herein and provide supporting 
documentation, which could, by way of example, include evidence of 
programming aired by the station during the relevant period such as 
program guides, electric power bills, or other evidence showing that 
the station was transmitting during this time period. HC2 recommends 
that the Commission ``be flexible with respect to such evidence, and 
accept evidence that reasonably verifies operation during the 
designated time period, such as internet access bills.'' The Commission 
agrees with HC2. To facilitate the certification process while also 
limiting the burden on stations attempting to comply, the Commission 
find that examples of documentation above are illustrative and 
recognize that there may be other types of supporting evidence of LPTV/
translator minimum operating requirements. With respect to FM stations, 
the Commission adopts its proposal that such stations must certify that 
they were licensed and transmitting at the facility implicated by the 
reorganization of broadcast television spectrum on April 13, 2017, or 
had an application for a license to cover on file with the Commission 
on that date. As noted above, the Commission also require LPTV/
translator and FM stations to certify on their reimbursement 
submissions that they have not received or do not expect to receive 
reimbursement from other sources for costs for which they are 
requesting reimbursement from the REA.
    80. Entities that certify that they meet the eligibility criteria 
may be subject to audits, data validations, site visits, or other 
verifications to substantiate the supporting evidence and 
representations with respect to eligibility, and such entities may be 
directed to make available any relevant documentation upon request from 
the Commission or its contractor. A false certification may result in 
disqualification and other sanctions provided for in the Communications 
Act and the Commission's rules.
    81. LPTV/translator and FM stations must also list their existing 
broadcasting equipment and the types of repacking-related costs they 
expect to incur on the Reimbursement Form. Similar to the reimbursement 
form used by full power, Class A, and MVPD entities, the Reimbursement 
Form for newly eligible entities will include a cost catalog that 
provides a list of the types of costs LPTV/translator and FM stations 
are most likely to incur together with a range of prices applicable to 
such expenses. The Media Bureau has sought comment on a proposed cost 
catalog of potentially reimbursable costs that may be incurred by LPTV/
translator and FM stations as a result of the incentive auction and 
repacking process to facilitate the process for reimbursing these 
entities. The final version of the cost catalog will be embedded in the 
revised Reimbursement Form. Entities may select the estimates indicated 
on the form or, alternatively, may choose to provide their own 
estimates. The Commission note that some LPTV/translator and FM 
stations will have already incurred costs eligible for reimbursement by 
the time the rules adopted in this proceeding become effective and the 
Commission begin accepting Eligibility Certifications and Reimbursement 
Forms. As proposed in the NPRM, these entities may indicate on their 
Reimbursement Form their actual costs and provide their invoices, 
instead of providing estimates, for costs already incurred before the 
Reimbursement Form is filed. Entities must also indicate on the form 
whether they will need to purchase new equipment in order to continue 
operating or whether they can reuse some of their existing equipment.
    82. In response to the Commission's invitation in the NPRM for 
comment on ways to streamline the reimbursement process for LPTV/
translator and FM stations, NTA proposes that the Commission use a 
``Fast Track'' approach to streamline reimbursement applications for 
stations willing to accept a strict dollar cap on their reimbursement. 
NTA further proposes that stations that opt to use the proposed ``Fast 
Track'' approach be exempt from certain reimbursement requirements, 
including the requirement to submit cost estimates and the requirement 
to reuse existing equipment. While the Commission shares the goals 
these commenters are seeking to achieve of simplifying and expediting 
the reimbursement process, the Commission finds that the ``Fast Track'' 
proposal is not a feasible option. First, it is critical that the 
Commission obtain an accurate estimate of eligible expenses from all 
entities requesting reimbursement to ensure that the Commission are not 
over-allocating for a particular entity and that the Commission has the 
information regarding the total demand on the Reimbursement Fund. It is 
only by having an accurate estimate of the total demand on the Fund 
that the Media Bureau can make reasoned allocation decisions and ensure 
a fair and equitable distribution of reimbursement funds. The 
Commission also notes that the REA itself contemplates that entities 
seeking reimbursement will submit cost estimates. Section 511(m)(2) of 
the REA provides that ``[t]he rulemaking completed under paragraph (1) 
shall include . . . procedures for the submission and review of cost 
estimates and other materials related to those costs consistent with 
the regulations developed by the Commission'' for reimbursement of full 
power, Class A, and MVPD entities under Section 6403(b) of the Spectrum 
Act. Second, although NTA's proposal for a ``Fast Track'' contains few 
details, the intent of the proposal appears to be to avoid requiring 
entities that avail themselves of this approach from the necessity to 
file certain information and/or follow certain procedures that would 
otherwise apply. The Commission notes that the Commission cannot, 
consistent with the REA, excuse entities from making the certifications 
in the Eligibility

[[Page 11247]]

Certification that are necessary to ensure that entities seeking 
reimbursement meet the criteria for eligibility established in this 
proceeding. Similarly, the Commission must obtain other information 
from entities seeking reimbursement, such as their existing 
broadcasting equipment, to ensure that the Commission have adequate 
information upon which to make reasoned allocation decisions and avoid 
waste, fraud, and abuse. As explained above, the Commission believe 
that it is critical to have estimates. Thus, upon consideration, the 
Commission cannot identify any filings or procedures that could be 
eliminated in a manner that would make a ``Fast Track'' achievable.
    83. The Commission declines to treat non-profit entities 
differently from for-profit entities in the reimbursement process for 
newly eligible entities. NPR proposes that, in distributing 
reimbursement funds, the Commission should ``prioritize the 
availability and timing of reimbursement for non-profit public radio 
stations (and possibly other non-profits), which have less ability to 
absorb or `front' the cost'' of activities needed to avoid time off-air 
or at reduced power during the transition. Its goal is to streamline 
and expedite its reimbursement process for all newly eligible entities, 
including the payment of initial and any subsequent allocations and the 
processing of reimbursement requests. The Commission expects all 
entities to be able to access reimbursement funds quickly once its 
reimbursement process is underway, thereby avoiding any need to 
prioritize the timing of allocations and/or reimbursement payments to 
non-profit or other entities. While the Commission stated its intention 
in the Incentive Auction R&O to issue NCE broadcasters initial 
allocations equivalent to a higher percentage of their estimated costs 
than commercial broadcasters due to the unique funding constraints 
faced by NCEs, the Commission does not believe a similar approach is 
warranted with respect to newly eligible entities. As noted above, many 
newly eligible entities will already have incurred eligible expenses by 
the time they can begin requesting reimbursement pursuant to the rules 
adopted in this proceeding. In addition, their average total expenses 
eligible for reimbursement is likely to be less than for full power 
stations. The Commission therefore believes it is less important that 
the Commission provide a higher initial allocation to NCE entities, or 
otherwise prioritize these entities in the reimbursement process, to 
ensure they can fund the modifications they must make as a result of 
the repacking process.

Reimbursement Allocations

    84. As proposed in the NPRM, once the Media Bureau completes its 
review of the Eligibility Certification and Reimbursement Form, it will 
issue an initial allocation from the Reimbursement Fund to each 
eligible LPTV/translator and FM station. These funds will be available 
for the entity to draw down as expenses are incurred. The amount of the 
initial allocation, as well as the total amount allocated to each 
entity, will depend in part on the number of newly eligible entities 
that file an Eligibility Certification and the amount available for 
reimbursement for each type of entity from fiscal year 2018 funds. In 
the NPRM, the Commission noted that, in the context of the existing 
reimbursement process for full power and Class A stations and MVPDs, 
the Media Bureau determined the appropriate allocation amount based on 
the circumstances and information available from submitted 
Reimbursement Forms. Consistent with this approach, the Commission has 
directed the Media Bureau to make allocation decisions for stations 
eligible for reimbursement under the REA.
    85. After the initial allocation of reimbursement funds, the Media 
Bureau may issue one or more subsequent allocation(s). As proposed in 
the NPRM, the timing and amount of these subsequent allocation(s) will 
depend in part on the fiscal year 2018 funds remaining in the 
Reimbursement Fund for each type of entity and the amount, if any, 
allocated from fiscal year 2019 funds, the eligible expenses entities 
have incurred, and the Commission's goal in terms of the amount of 
eligible costs the Commission expect to be able to cover for each 
entity. As discussed above, fiscal year 2019 funds will be subject to 
prioritization of reimbursement for full power and Class A stations and 
MVPDs. The Commission directs the Media Bureau to allocate fiscal year 
2019 funds consistent with this prioritization approach.
    86. NAB argues that the FCC should not hold back funds for multiple 
allocations unless there is reason to believe that the available funds 
will be insufficient. Instead, NAB proposes that, as soon as the 
Commission receives cost estimates and assuming sufficient funds are 
available, the Commission should immediately make 80 percent of 
estimated costs available to all eligible entities and should consider 
making even more available in its initial allocation unless there is a 
concrete reason to believe the available funds will be insufficient. 
The Commission declines at this time to adopt NAB's proposal. The 
Commission believes the best approach is for the Media Bureau to 
determine initial allocation amounts after cost estimates are submitted 
and total demand on the Reimbursement Fund is assessed, consistent with 
its experience with the full power and Class A reimbursement program.
    87. Similarly, the Commission believes the best approach is for the 
Media Bureau to determine the timing and number of any additional 
allocations, consistent with the approach the Commission have taken 
with respect to full power, Class A, and MVPD entities, based on 
prudent fund administrative practices, the amount of estimated 
expenses, the amount of funds drawn down, and the amount remaining in 
the Reimbursement Fund for each type of eligible entity.
Prioritization of Types of Costs
    88. The Commission will permit entities to be reimbursed for both 
hard costs, such as new equipment and tower rigging, and soft costs, 
such as legal, engineering, and project management expenses, as 
proposed in the NPRM. In addition, the Commission will not prioritize 
hard costs over soft costs.
    89. The Commission noted in the NPRM that the total amount of 
reimbursement funds available to LPTV/translator or FM stations may not 
be sufficient to cover all eligible expenses at the end of the program 
and it may therefore be necessary to establish a prioritization scheme 
for reimbursing eligible expenses. The Commission sought comment on 
whether the Commission should, at least with respect to initial 
allocations, prioritize the payment of certain costs, such as certain 
equipment and engineering expenses, over other types of expenses, such 
as project management fees. While some commenters who address this 
issue support prioritization of hard costs over project management and 
other soft costs, others oppose such an approach. The Commission is 
persuaded by NPR's position that ``soft costs'' such as project 
management fees may be just as important to stations as ``hard costs'' 
and should be reimbursed in the same manner and priority as such costs, 
and find no basis in the current record, nor any statutory direction, 
to prioritize hard costs over soft costs. Thus, the Commission 
concludes that the Commission will reimburse all costs, hard and soft, 
in the same manner in order to allow entities to determine how best to 
manage their reimbursement funds in light of their own transition 
needs.

[[Page 11248]]

Procedures for Submission of Invoices, Financial Forms, and Payments
    90. As proposed in the NPRM, the Commission will use substantially 
similar procedures for the submission of reimbursement requests and the 
issuance of reimbursement payments to the newly eligible entities as 
the Commission use in the existing full power and Class A station 
reimbursement program. Specifically, LPTV/translator and FM stations 
must submit requests for reimbursement for expenses they have incurred, 
together with any required supporting documentation, using the 
Reimbursement Form (FCC Form 2100, Schedule 399), which the Media 
Bureau will revise for this purpose. As required for full power and 
Class A stations and MVPDs, LPTV/translator and FM stations will submit 
the Reimbursement Form electronically via the Commission's LMS 
database. After an allocation is made, stations will be able to draw 
reimbursement payments from the U.S. Treasury as they incur expenses 
eligible for reimbursement and submit invoices that are approved for 
payment.
    91. As also proposed in the NPRM, the Commission will revise 
versions of the financial forms currently being used by full power, 
Class A, and MVPD entities for purposes of reimbursing eligible LPTV/
translator and FM stations. These procedures are set forth in the 
Financial Procedures PN. At the beginning of the reimbursement process, 
LPTV/translator and FM stations will be required to use a procedure and 
form similar to its existing FCC Form 1876 to submit payment 
instructions to the Commission and to provide bank account information 
for the reimbursement payment recipient in the CORES Incentive Auction 
Financial Module. Entities will be able to track reimbursement payments 
using the Auction Payments component of the CORES Incentive Auction 
Financial Module.
    92. Prior to the end of the reimbursement period, entities must 
provide information regarding their actual and, if applicable, any 
remaining estimated costs and will be issued a final allocation, if 
appropriate, to cover the remainder of their eligible costs. If any 
allocated funds remain in excess of the entity's actual costs 
determined to be eligible for reimbursement, those funds will revert 
back to the Reimbursement Fund. In addition, if an overpayment is 
discovered, even after the final allocation has been made, the entity 
receiving an overpayment must return the excess to the Commission.
    93. As the Commission proposed in the NPRM, the Commission will 
simplify and streamline the forms to be used by newly eligible entities 
to facilitate and expedite the reimbursement process. NPR urges the 
Commission to incorporate specific features to make the forms easier to 
use, including avoiding character or word count restrictions and 
including print and ``cut and paste'' functionality in the web-based 
forms. The Commission plans to pay close attention to these and other 
suggestions for improving its processes as the Commission develop forms 
and procedures for use by newly eligible entities. The Commission is 
also mindful, however, of those commenters who urge the Commission to 
make as few changes as possible to the existing forms to avoid the need 
for broadcasters and others who are used to the current forms to spend 
time and resources familiarizing themselves with new forms. Its goal is 
to incorporate changes that facilitate and streamline the reimbursement 
process while avoiding unnecessary changes that could negatively impact 
users.
Measures To Prevent Waste, Fraud, and Abuse
    94. As proposed in the NPRM, the Commission establishes strong 
measures to protect against waste, fraud, and abuse with respect to 
disbursements from the Reimbursement Fund for newly eligible entities. 
For example, entities must document their actual expenses, including by 
providing all relevant invoices and receipts, and retaining other 
relevant records to substantiate their certifications and reimbursement 
claims. Similar to the existing requirement for full power, Class A, 
and MVPD entities, LPTV/translator and FM stations seeking 
reimbursement must retain all relevant documents pertaining to 
construction or other reimbursable changes or expenses for a period 
ending not less than 10 years after the date on which the entity 
receives final payment from the Reimbursement Fund.
    95. The Media Bureau will develop a Reimbursement Form for use by 
LPTV/translator and FM stations that will contain certifications 
similar to those on the Reimbursement Form used by full power, Class A, 
and MVPD entities. Thus, an LPTV/translator or FM station seeking 
reimbursement must certify, inter alia, that it believes in good faith 
that it will reasonably incur all of the estimated costs that it claims 
as eligible for reimbursement on the estimated cost form, it will use 
all money received from the Reimbursement Fund only for expenses it 
believes in good faith are eligible for reimbursement, and it will 
comply with all policies and procedures related to reimbursement.
    96. As noted above, the Commission will conduct audits, data 
validations, and site visits, as appropriate, to prevent waste, fraud, 
and abuse and to maximize the amount of money available for 
reimbursement. The Commission disagrees with HC2's contention that 
audits or other validations by a third-party are unnecessary to 
substantiate certifications such as the minimum operating requirements 
for LPTV/translator stations. The Commission has previously determined 
that, with respect to the incentive auction reimbursement program, 
``audits, data validations, and site visits are essential tools in 
preventing waste, fraud, and abuse, and that use of these measures will 
maximize the amount of money available for reimbursement.'' Based on 
its experience administering the reimbursement program for full power 
and Class A stations and MVPDs, the Commission continues to believe 
that audits, site visits, and other validation mechanisms are essential 
for preventing waste, fraud, and abuse. The Commission reminds stations 
that a false certification may result in disqualification and other 
sanctions provided for in the Communications Act and the Commission's 
rules. If the Commission discovers evidence of intentional fraud, the 
Commission will refer the matter to the Commission's Office of 
Inspector General or to law enforcement for criminal investigation, as 
appropriate.
    97. Finally, to ensure transparency with respect to the 
Reimbursement Fund, the Commission will make eligibility and actual 
cost information available to the public as well as information 
regarding Reimbursement Fund disbursements. This is similar to the 
process used with respect to full power, Class A, and MVPD 
reimbursement.

Other Issues

    98. Reimbursement of Indirect Expenses for Full Power and Class A 
Stations. The Commission declines a suggestion put forth by Cox and 
supported by NAB to permit full power television stations to seek 
reimbursement under the new REA provisions for costs that are not the 
result of their own channel change, but instead are the result of a 
collocated station's repacking activities. The NPRM did not propose to 
revisit issues with respect to reimbursement of full power and Class A 
stations. The Commission therefore dismisses this request because

[[Page 11249]]

it is beyond the scope of the NPRM. On alternative and independent 
grounds, the Commission notes that Cox has in any event provided no 
basis for revisiting its prior decision, which is compelled by its 
reading of the statute. Cox and NAB acknowledge that the Commission has 
previously declined to allow reimbursement for stations that incur 
indirect expenses due to repacking activities for other stations based 
on concerns over potential exhaustion of available repacking funds. 
However, because in some cases a repacked station may not have an 
express contractual obligation to reimburse collocated stations for 
repack expenses, Cox maintains that there exists an ``inequitable 
situation where some full-power television stations can have their 
direct repack expenses reimbursed, whereas other stations must pay for 
their costs themselves, depending on when their tower leasing 
agreements were drafted.'' Although the Commission is sensitive to the 
fact that it is possible that some stations may incur expenses as a 
result of a repacked station implementing its post-auction channel 
facilities, consistent with the Spectrum Act, the Commission only 
allows reimbursement of a television station's own repack expenses, 
that is, expenses ``to relocate its television service from one channel 
to the other.'' In the scenario posited by Cox, the expenses are not 
incurred by the station ``to relocate its television service from one 
channel to the other,'' but instead are incurred because of a different 
station's repacking activities. Thus, the Commission does not have 
statutory authority to permit reimbursement of such expenses. As the 
Commission said in the Incentive Auction R&O, the Commission allow 
reimbursement to the repacked station in this scenario if it had an 
express contractual obligation to pay the expenses of other collocated 
stations as of the date of release of the Incentive Auction R&O.

Final Regulatory Flexibility Act Analysis

    As required by the Regulatory Flexibility Act of 1980, as amended 
(RFA), Initial Regulatory Flexibility Analyses (``IRFAs'') were 
incorporated in the Notice of Proposed Rulemaking (``NPRM''). The 
Commission sought written public comment on the proposals in the NPRM, 
including comment on the IRFAs. Because the Commission amended the 
rules in this R&O, it included this Final Regulatory Flexibility 
Analysis (``FRFA'') which conforms to the RFA.

Need for and Objectives of the Rules

    In the Report and Order, the Commission adopted rules to implement 
Congress's directive in the 2018 Reimbursement Expansion Act (REA) that 
it reimburse certain Low Power Television (LPTV) and television 
translator (TV translator) stations (together LPTV/translator 
stations), and FM broadcast stations (FM stations), for costs incurred 
as a result of the Commission's broadcast television spectrum incentive 
auction. In the REA, Congress provided additional funding for the TV 
Broadcaster Relocation Fund (Reimbursement Fund) and expanded the list 
of entities eligible to receive reimbursement for costs reasonably 
incurred as a result of the reorganization of broadcast television 
spectrum to include LPTV/translator and FM stations. The Report and 
Order adopts rules relating to eligibility, expenses, and procedures 
the Commission will use to provide reimbursement to these entities, and 
mandates the use of various measures designed to protect the 
Reimbursement Fund against waste, fraud, and abuse.
    As proposed in the NPRM, the Commission adopts a process to 
reimburse the newly eligible entities that is substantially similar to 
that which it currently uses to reimburse full power and Class A 
stations and multichannel video programming distributors (MVPDs) as 
established in the Incentive Auction R&O. Specifically, the Commission:
     Concludes that the REA permits the Commission to use the 
funds appropriated to the Reimbursement Fund for fiscal year 2019 to 
reimburse eligible LPTV/translator and FM stations as well as full 
power and Class A stations and MVPDs, and that the Commission will 
prioritize payments to full power, Class A, and MVPD entities over 
payments to LPTV/translator and FM entities.
     Conclude that LPTV/translator stations are eligible for 
reimbursement if: (1) They filed an application during the Commission's 
Special Displacement Window and obtained a construction permit, and (2) 
were licensed and transmitting for at least 9 of the 12 months prior to 
April 13, 2017, as required by the REA.
     Conclude that the Commission will reimburse LPTV/
translator stations for their reasonable costs to construct the 
facilities authorized by the grant of the station's Special 
Displacement Window application.
     Conclude that full power and low power FM stations and FM 
translators that were licensed and transmitting on April 13, 2017, 
using the facilities impacted by the repacked television station are 
eligible for reimbursement under the REA. The Commission finds that 
this will include FM stations that incur costs because they must 
permanently relocate, temporarily or permanently modify their 
facilities, or purchase or modify auxiliary facilities to provide 
service during a period of time when construction work is occurring on 
a collocated, adjacent, or nearby repacked television station's 
facilities.
     Conclude that the Commission will reimburse up to 100 
percent of the costs eligible for reimbursement for FM stations that 
must relocate permanently, temporarily or permanently modify 
facilities, or purchase or modify auxiliary equipment to avoid going 
silent as a result of the repacking process.
     Conclude that the Commission will not reimburse LPTV/
translator or FM stations for costs for which they have already 
received reimbursement funding from other sources.
     Require LPTV/translator and FM stations seeking 
reimbursement to file with the Commission one or more forms certifying 
that they meet the eligibility criteria established in this proceeding 
for reimbursement, providing information regarding their current 
broadcasting equipment, and providing an estimate of their costs 
eligible for reimbursement.
     Find that, after the submission of information, the Media 
Bureau will provide eligible entities with an allocation of funds to be 
available for draw down as the entities incur expenses. The Media 
Bureau will make an initial allocation toward eligible expenses, 
followed by subsequent allocation(s) as needed, to the extent funds 
remain for LPTV/translator stations and FM stations in the 
Reimbursement Fund.
     Conclude that the Commission will use revised versions of 
the financial forms currently being used by full power, Class A, and 
MVPD entities for purposes of reimbursing eligible LPTV/translator and 
FM stations, and use the same procedures to provide reimbursement 
payments to these newly eligible entities.
     Discuss the measures the Commission will take to protect 
the Reimbursement Fund against waste, fraud, and abuse.

Summary of Significant Issues Raised by Public Comments in Response to 
the IRFA

    No formal comments were filed on the IRFA but some commenters 
raised

[[Page 11250]]

issues concerning the impact of the various proposals in this 
proceeding on small entities. These comments were considered in the 
Report and Order and in the FRFA.

Response to Comments by the Chief Counsel for Advocacy of the Small 
Business Administration

    No comments were filed on the IRFAs by the Small Business 
Administration.

Description and Estimate of the Number of Small Entities to Which the 
Rules Will Apply

    The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the rules adopted herein. The RFA generally defines the 
term ``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A ``small business concern'' is one which: (1) Is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the SBA.
    Radio and Television Broadcasting and Wireless Communications 
Equipment Manufacturing. This industry comprises establishments 
primarily engaged in manufacturing radio and television broadcast and 
wireless communications equipment. Examples of products made by these 
establishments are: Transmitting and receiving antennas, cable 
television equipment, GPS equipment, pagers, cellular phones, mobile 
communications equipment, and radio and television studio and 
broadcasting equipment. The Small Business Administration has 
established a size standard for this industry of 750 employees or less. 
Census data for 2012 show that 841 establishments operated in this 
industry in that year. Of that number, 819 establishments operated with 
less than 500 employees. Based on this data, the Commission concludes 
that a majority of manufacturers in this industry are small.
    Audio and Video Equipment Manufacturing. This industry comprises 
establishments primarily engaged in manufacturing electronic audio and 
video equipment for home entertainment, motor vehicles, and public 
address and musical instrument amplification. Examples of products made 
by these establishments are video cassette recorders, televisions, 
stereo equipment, speaker systems, household-type video cameras, 
jukeboxes, and amplifiers for musical instruments and public address 
systems. The SBA has established a size standard for this industry, in 
which all firms with 750 employees or less are small. According to U.S. 
Census data for 2012, 492 audio and video equipment manufacturers were 
operational in that year. Of that number, 476 operated with fewer than 
500 employees. Based on this Census data and the associated size 
standard, the Commission concludes that the majority of such 
manufacturers are small.
    Radio Stations. This economic Census category ``comprises 
establishments primarily engaged in broadcasting aural programs by 
radio to the public.'' The SBA has created the following small business 
size standard for this category: Those having $38.5 million or less in 
annual receipts. Census data for 2012 shows that 2,849 firms in this 
category operated in that year. Of this number, 2,806 firms had annual 
receipts of less than $25,000,000, and 43 firms had annual receipts of 
$25,000,000 or more. Because the Census has no additional 
classifications that could serve as a basis for determining the number 
of stations whose receipts exceeded $38.5 million in that year, the 
Commission concludes that the majority of television broadcast stations 
were small under the applicable SBA size standard.
    Apart from the U.S. Census, the Commission has estimated the number 
of licensed commercial AM radio stations to be 4,619 stations and the 
number of commercial FM radio stations to be 6,754, for a total number 
of 11,373. Of this total, 9,898 stations had revenues of $38.5 million 
or less, according to Commission staff review of the BIA Kelsey Inc. 
Media Access Pro Television Database (BIA) in October 2014. In 
addition, the Commission has estimated the number of noncommercial 
educational (NCE) FM radio stations to be 4,135. NCE stations are non-
profit, and therefore considered to be small entities. Therefore, the 
Commission estimates that the majority of radio broadcast stations are 
small entities.
    Low Power FM Stations. The same SBA definition that applies to 
radio stations would apply to low power FM stations. As noted above, 
the SBA has created the following small business size standard for this 
category: Those having $38.5 million or less in annual receipts. The 
Commission has estimated the number of licensed low power FM stations 
to be 2,172. In addition, as of December 31, 2018, there were a total 
of 7,952 FM translator and FM booster stations. Given that low power FM 
stations and FM translators and boosters are too small and limited in 
their operations to have annual receipts anywhere near the SBA size 
standard of $38.5 million, we will presume that these licensees qualify 
as small entities under the SBA definition.
    The Commission notes again, however, that in assessing whether a 
business concern qualifies as ``small'' under the above definition, 
business (control) affiliations must be included. Because the 
Commission does not include or aggregate revenues from affiliated 
companies in determining whether an entity meets the applicable revenue 
threshold, its estimate of the number of small radio broadcast stations 
affected is likely overstated. In addition, as noted above, one element 
of the definition of ``small business'' is that an entity not be 
dominant in its field of operation. The Commission is unable at this 
time to define or quantify the criteria that would establish whether a 
specific radio broadcast station is dominant in its field of operation. 
Accordingly, its estimate of small radio stations potentially affected 
by the proposed rules includes those that could be dominant in their 
field of operation. For this reason, such estimate likely is over-
inclusive.
    Television Broadcasting. This economic Census category ``comprises 
establishments primarily engaged in broadcasting images together with 
sound. These establishments operate television broadcasting studios and 
facilities for the programming and transmission of programs to the 
public.'' These establishments also produce or transmit visual 
programming to affiliated broadcast television stations, which in turn 
broadcast the programs to the public on a predetermined schedule. 
Programming may originate in their own studio, from an affiliated 
network, or from external sources. The SBA has created the following 
small business size standard for Television Broadcasting firms: Those 
having $38.5 million or less in annual receipts. The 2012 economic 
Census reports that 751 television broadcasting firms operated during 
that year. Of that number, 656 had annual receipts of less than $25 
million per year. Based on that Census data the Commission concludes 
that a majority of firms that operate television stations are small. 
The Commission therefore estimates that the majority of commercial 
television broadcasters are small entities.
    The Commission notes, however, that in assessing whether a business 
concern qualifies as small under the above definition, business 
(control) affiliations must be included. The Commission's estimate, 
therefore, likely overstates the

[[Page 11251]]

number of small entities that might be affected by its action because 
the revenue figure on which it is based does not include or aggregate 
revenues from affiliated companies. In addition, an element of the 
definition of ``small business'' is that the entity not be dominant in 
its field of operation. The Commission is unable at this time to define 
or quantify the criteria that would establish whether a specific 
television station is dominant in its field of operation. Accordingly, 
the estimate of small businesses to which rules may apply does not 
exclude any television station from the definition of a small business 
on this basis and is therefore possibly over-inclusive to that extent.
    In addition, the Commission has estimated the number of licensed 
NCE television stations to be 388. These stations are non-profit, and 
therefore considered to be small entities.
    There are also 2,295 LPTV stations, including Class A stations, and 
3,654 TV translator stations. Given the nature of these services, the 
Commission will presume that all of these entities qualify as small 
entities under the above SBA small business size standard.

Description of Projected Reporting, Recordkeeping and Other Compliance 
Requirements

    The R&O adopts the following revised reporting or recordkeeping 
requirements. To implement the REA, eligible entities must file forms 
to demonstrate their eligibility and estimated costs for reimbursement. 
Specifically, the Report and Order states that entities will use 
revised versions of the forms currently being used by full power, Class 
A, and multichannel video programming distributors (MVPD) entities from 
the incentive auction for purposes of reimbursing eligible LPTV/
translator and FM stations. The Report and Order also states that the 
Commission will use the procedures to provide reimbursement payments to 
these newly eligible entities that are similar to those it used for 
reimbursement in the incentive auction. For example, LPTV, TV 
translators, and FM stations will be required to submit their 
Eligibility Certification, cost estimates, and subsequent requests for 
reimbursement for expenses they have incurred, together with any 
required supporting documentation, using the Reimbursement Form (FCC 
Form 2100, Schedule 399), which the Media Bureau will revise for this 
purpose. As required for full power and Class A stations and MVPDs, 
LPTV/translator and FM stations will submit the Reimbursement Form 
electronically via the Commission's Licensing and Management System 
(LMS) database. In addition, LPTV/translator and FM stations that seek 
reimbursement will use a procedure and form similar to the existing FCC 
Form 1876 to provide financial information to the Commission in order 
to receive reimbursement payments and will file electronically in the 
CORES Incentive Auction Financial Module.
    These new reporting requirements will not differently affect small 
entities.

Steps Taken To Minimize Significant Impact on Small Entities, and 
Significant Alternatives Considered

    The RFA requires an agency to describe any significant alternatives 
that it has considered in reaching its approach, which may include the 
following four alternatives (among others): ``(1) the establishment of 
differing compliance or reporting requirements or timetables that take 
into account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for small entities.''
    The Report and Order adopts rules to implement the REA. The rules 
are designed allow all entities, including small entity broadcasters, 
to seek reimbursement in a manner that is streamlined and the least 
burdensome. The Report and Order adopts a reimbursement process for 
newly eligible LPTV/translator and FM stations that is substantially 
similar to the current reimbursement process. The Commission concludes 
that using a process and resources that have proven effective and that 
are already familiar to many of the entities that will be seeking 
reimbursement will help result in a smooth and efficient reimbursement 
process for newly eligible entities. At the same time, the Commission 
indicated in the item that it will simplify and streamline the forms to 
be used by newly eligible entities, to the extent possible, in order to 
expedite and facilitate the reimbursement process. Some commenters 
urged the Commission to make as few changes as possible to the existing 
forms to avoid the need for broadcasters and others who are used to the 
current forms to spend time and resources familiarizing themselves with 
new forms. As the Commission stated in the item, its goal is to 
incorporate changes that facilitate and streamline the reimbursement 
process while avoiding unnecessary changes that could negatively affect 
users.
    The Commission considered and ultimately rejected a proposal that 
it use a ``Fast Track'' approach to streamline reimbursement 
applications for stations willing to accept a strict dollar cap on 
their reimbursement. NTA proposed that stations that opt to use the 
proposed ``Fast Track'' approach be exempt from certain reimbursement 
requirements, including the requirement to submit cost estimates and 
the requirement to reuse existing equipment. While the Commission 
shared the goals these commenters are seeking to achieve of simplifying 
and expediting the reimbursement process, it concluded that the ``Fast 
Track'' proposal is not a feasible option because it is critical that 
it obtain an accurate estimate of eligible expenses from all entities 
requesting reimbursement to ensure that is not over-allocating for a 
particular entity and that we have the information regarding the total 
demand on the Reimbursement Fund. The Commission also note that the REA 
itself contemplates that entities seeking reimbursement will submit 
cost estimates. In addition, although NTA's position on this is 
unclear, the Commission cannot, consistent with the REA, excuse 
entities from making the certifications in the Eligibility 
Certification that are necessary to ensure that entities seeking 
reimbursement meet the criteria for eligibility established in this 
proceeding. Similarly, the Commission must obtain other information 
from entities seeking reimbursement, such as their existing 
broadcasting equipment, to ensure that it has adequate information upon 
which to make reasoned allocation decisions and avoid waste, fraud, and 
abuse. Thus, upon consideration, the Commission could not identify any 
filings or procedures that could be eliminated in a manner that would 
make a ``Fast Track'' achievable.

Report to Congress

    The Commission will send a copy of the R&O, including the FRFA, in 
a report to be sent to Congress pursuant to the Congressional Review 
Act. In addition, the Commission will send a copy of the R&O, including 
the FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the 
R&O and FRFA (or summaries thereof) will also be published in the 
Federal Register.

List of Subjects in 47 CFR Part 73

    Television.


[[Page 11252]]


Federal Communications Commission.
Marlene Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 73 as follows:

PART 73--RADIO BROADCAST SERVICES

0
1. The authority citation for part 73 continues to read as follows:

    Authority: 47 U.S.C. 154, 155, 301, 303, 307, 309, 310, 334, 
336, 339.


0
2. Add Sec.  73.3701 to read as follows:


Sec.  73.3701  Reimbursement under the Reimbursement Expansion Act.

    (a) Definitions--(1) Eligibility Certification/Reimbursement Form. 
For purposes of this section, the term Eligibility Certification/
Reimbursement Form means the form(s) developed by the Media Bureau for 
processing reimbursement requests under the Reimbursement Expansion 
Act.
    (2) FM station. For purposes of this section, the term FM station 
means an ``FM broadcast station'' as defined in Sec.  73.310.
    (3) Incentive Auction. For purposes of this section, the term 
Incentive Auction means the broadcast television spectrum incentive 
auction and repacking process conducted under section 6403 of the 
Spectrum Act specifying the new channel assignments and technical 
parameters of any broadcast television stations that are reassigned to 
new channels.
    (4) Licensed. For purposes of this section, the term licensed means 
a station that was licensed or that had an application for a license to 
cover on file with the Commission on April 13, 2017.
    (5) Low power television station. For purposes of this section, the 
term low power television station means a low power television station 
as defined in 47 CFR 74.701.
    (6) Predetermined cost estimate. For purposes of this section, 
predetermined cost estimate means the estimated cost of an eligible 
expense as generally determined by the Media Bureau in a catalog of 
expenses eligible for reimbursement.
    (7) Reimbursement Expansion Act or REA. For purposes of this 
section, the term Reimbursement Expansion Act or REA means Division E, 
Financial Services & General Appropriation Act, 2018, Title V 
Independent Agencies, Public Law 115-141, Section 511 (codified at 47 
U.S.C. 1452(j)-(n)) adopted as part of the Consolidated Appropriations 
Act, 2018, Public Law 115-141 (2018).
    (8) Reimbursement period. For purposes of this section, 
reimbursement period means the period ending July 3, 2023, pursuant to 
section 511(j)(3)(B) of the REA.
    (9) Replacement translator station. For purposes of this section, 
the term replacement translator station means analog to digital 
replacement translator stations authorized pursuant to 47 CFR 
74.787(a)(5).
    (10) Spectrum Act. For purposes of this section, the term Spectrum 
Act means Title VI of the Middle Class Tax Relief and Job Creation Act 
of 2012 (Pub. L. 112-96).
    (11) Special Displacement Window. For purposes of this section, the 
term Special Displacement Window means the displacement application 
filing window conducted April 10, 2018 to June 1, 2018 for low power 
television, TV translator, and analog-to-digital replacement translator 
stations that were displaced by the incentive auction and repacking 
process.
    (12) Transmitting. For purposes of this section, the term 
transmitting means a low power television station, TV translator 
station, or replacement translator station operating not less than 2 
hours in each day of the week and not less than a total of 28 hours per 
calendar week for 9 of the 12 months prior to April 13, 2017.
    (13) Reimbursement Fund. For purposes of this section, the 
Reimbursement Fund means the additional funding established by the REA.
    (14) TV translator station. For purposes of this section, the term 
TV translator station means a ``television broadcast translator 
station'' as defined in 47 CFR 74.701.
    (b) Eligibility for reimbursement. Only the following entities are 
eligible for reimbursement of relocation costs reasonably incurred:
    (1) Low power television stations. Low power television stations 
that filed an application for construction permit during the Special 
Displacement Window and such application was subsequently granted. 
Station must have been licensed and transmitting for not less than 2 
hours in each day of the week and not less than a total of 28 hours per 
calendar week for 9 of the 12 months prior to April 13, 2017.
    (2) TV translator stations. TV translator stations that filed an 
application for construction permit during the Special Displacement 
Window and such application was subsequently granted. Station must have 
been licensed and transmitting for not less than 2 hours in each day of 
the week and not less than a total of 28 hours per calendar week for 9 
of the 12 months prior to April 13, 2017.
    (3) Replacement translator stations. Replacement translator 
stations that filed an application for construction permit during the 
Special Displacement Window and such application was subsequently 
granted. Station must have been licensed and transmitting for not less 
than 2 hours in each day of the week and not less than a total of 28 
hours per calendar week for 9 of the 12 months prior to April 13, 2017.
    (4) FM station. FM stations licensed and transmitting as of April 
13, 2017, that experienced, at the site at which they were licensed and 
transmitting on that date, a disruption of service as a result of the 
reorganization of broadcast television spectrum under 47 U.S.C. 
1452(b).
    (c) Reimbursement process--(1) Estimated costs. (i) All entities 
that are eligible to receive reimbursement will be required to file an 
estimated cost form providing an estimate of their reasonably incurred 
costs and provide supporting documentation.
    (ii) Each eligible entity that submits an estimated cost form will 
be required to certify on its Eligibility Certification/Reimbursement 
Form inter alia, that:
    (A) It is eligible for reimbursement;
    (B) It believes in good faith that it will reasonably incur all of 
the estimated costs that it claims are eligible for reimbursement on 
the estimated cost form;
    (C) It will use all money received from the Reimbursement Fund only 
for expenses it believes in good faith are eligible for reimbursement;
    (D) It will comply with all policies and procedures relating to 
allocations, draw downs, payments, obligations, and expenditures of 
money from the Reimbursement Fund;
    (E) It will maintain detailed records, including receipts, of all 
costs eligible for reimbursement actually incurred;
    (F) It will file all required documentation of its relocation 
expenses as instructed by the Media Bureau;
    (G) It has not received nor does it expect to receive reimbursement 
from other sources for costs for which they are requesting 
reimbursement from the REA; and
    (H) Low power television stations, TV translator stations, and 
replacement translator stations must certify compliance with the 
minimum operating requirement set forth in paragraph (b)(1), (2), or 
(3) of this section.

[[Page 11253]]

    (I) FM stations must certify that they were licensed and 
transmitting at the facility implicated by the Incentive Auction on 
April 13, 2017.
    (iii) If an eligible entity seeks reimbursement for new equipment, 
it must provide a justification as to why it is reasonable under the 
circumstances to purchase new equipment rather than modify its 
corresponding current equipment.
    (iv) Eligible entities that submit their own cost estimates, as 
opposed to the predetermined cost estimates provided in the estimated 
cost form, must submit supporting evidence and certify that the 
estimate is made in good faith.
    (2) Final Allocation Deadline. (i) Upon completing construction or 
other reimbursable changes, or by a specific deadline prior to the end 
of the Reimbursement Period to be established by the Media Bureau, 
whichever is earlier, all eligible entities that received an initial 
allocation from the Reimbursement Fund must provide the Commission with 
information and documentation, including invoices and receipts, 
regarding their actual expenses incurred as of a date to be determined 
by the Media Bureau (the ``Final Allocation Deadline'').
    (ii) If an eligible entity has not yet completed construction or 
other reimbursable changes by the Final Allocation Deadline, it must 
provide the Commission with information and documentation regarding any 
remaining eligible expenses that it expects to reasonably incur.
    (3) Final accounting. After completing all construction or 
reimbursable changes, eligible entities that have received money from 
the Reimbursement Fund will be required to submit final expense 
documentation containing a list of estimated expenses and actual 
expenses as of a date to be determined by the Media Bureau. Entities 
that have finished construction and have submitted all actual expense 
documentation by the Final Allocation Deadline will not be required to 
file at the final accounting stage.
    (4) Documentation requirements. (i) Each eligible entity that 
receives payment from the Reimbursement Fund is required to retain all 
relevant documents pertaining to construction or other reimbursable 
changes for a period ending not less than 10 years after the date on 
which it receives final payment from the Reimbursement Fund.
    (ii) Each eligible entity that receives payment from the 
Reimbursement Fund must make available all relevant documentation upon 
request from the Commission or its contractor.

[FR Doc. 2019-05598 Filed 3-25-19; 8:45 am]
 BILLING CODE 6712-01-P