Before the

FEDERAL COMMUNICATIONS COMMISSION

Washington, D.C. 20554

In the Matter of Assessment and Collection of Regulatory Fees for Fiscal Year 2019

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MD Docket No. 19-105

COMMENTS OF MARANATHA BROADCASTING COMPANY, INC.

Maranatha Broadcasting Company, Inc. (“MBC”) hereby offers its comments on the

Further Notice of Proposed Rulemaking (“FNPRM”) in the above-referenced proceeding. The

FNPRM looks at several issues. Of importance to MBC is the question posed in the FNPRM of

whether the regulatory fees set for VHF stations should be reduced to lessen the economic

burden on these technically inferior stations. 1

In its initial Notice of Proposed Rulemaking (“NPRM”) in this proceeding, the FCC, in

attempting to create a more accurate system for allocating the regulatory fees to be paid by

television stations, asked for comments on its decision to move to a system based on the

population served by each television station, rather than one based on the Designated Market

Area (“DMA”) in which that station operates.2 In response to the NPRM, MBC argued that the

system that the FCC proposed to adopt would impose a significant economic burden on some of

the technically weakest stations in their TV markets – VHF stations.3 Due to the reliance on the

1 See Assessment and Collection of Regulatory Fees for Fiscal Year 2019, Report and Order and Further

Notice of Proposed Rulemaking, MD Docket No. 19-105, FCC 19-83, at 26-27 ⁋ 68 (rel. Aug. 27, 2019)

(“2019 Order” or “2019 FNPRM”). 2 See Assessment and Collection of Regulatory Fees for Fiscal Year 2019, Notice of Proposed

Rulemaking, MD Docket No. 19-105, FCC 19-37, at 4 ¶ 7 (rel. May 8, 2019) (“2019 NPRM”). 3 Though the MBC Comments on the NPRM were timely filed and are listed in the FCC’s ECFS database

for this proceeding, they were ignored by the Commission in its consideration – not even being listed

among the parties filing comments in that proceeding.

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predicted coverage of stations based on the FCC’s standard predictive coverage tools, and not

taking into account the inherent technical inferiority of the VHF signal in the digital broadcasting

world, the Commission ends up placing a significantly higher burden on VHF stations than is

warranted by the actual reach of their signals.

MBC continues to believe that this burden on VHF stations is unjustified and should be

rectified in this proceeding. The burdens imposed by the predicted population-based fees do not

properly “take into account factors that are reasonably related to the benefits provided to the

payor of the fee by the Commission’s activities” as required by the provisions of the RAY

BAUM’S Act which establishes the authority of the Commission to set the annual regulatory

fees to be paid by the various entities regulated by the Commission.4

In its Order adopting the proposals set forth in the NPRM, the Commission implemented

policies that it has been considering for several years to change from a system where it bases fees

on the DMA in which the television station operates to one that is based on the population served

by each individual station.5 Thus, the Commission decided to use the population within the

interference-free service contour of a TV station to compute the fee that the station will pay,

rather than basing the fee on the population of the DMA in which a station competes.6 The

stated intent was to allocate the fees paid by broadcast television stations in a way that “would

more accurately reflect the actual market served by a full-power broadcast television station.”7

While this proposal has been under consideration for several years, there were few

comments in the past from broadcasters. With the release of the NPRM, which included a table

of the fees proposed for each individual station, the true impact of the change and its potential

4 See 2019 NPRM at 4 ¶ 7. 5 See 2019 Order at 12 ⁋⁋ 29-31. 6 Id. at ⁋ 30. 7 Id. at ¶ 29.

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unintended consequences became clear, even though the proposal was only partially

implemented this year.8 The fees set out for VHF stations caused several parties, including

MBC, to complain that these fees were going to be too high for VHF stations.9 Of particular

concern was the adverse impact on VHF stations operating with powers in excess of the normal

class maximum for these stations as they try to ameliorate the inferiority of the VHF signal in the

digital television world.

As comments on the NPRM argued, the Commission’s proposal to base its fees on the

population within the TV station’s projected noise-limited contours did not reflect an adequate

measure of the actual service provided by stations – particularly VHF stations. The Commission

has recognized many times the inferiority of the VHF station’s signal reception when operating

in a digital mode. For instance, in the recent incentive auction, broadcasters were paid to move

from a UHF to a VHF channel and paid even more to move to a low VHF channel, because of

the technical inferiority of those channels and their inherent undesirability to broadcasters.10 In

the context of regulatory fees, the FCC recognized the change in status of VHF from the

preferred means of transmission in analog broadcasting to an inferior one in digital, by removing

the premium that VHF stations had paid in their regulatory fees before the digital transition.11

In connection with an application to increase the power of MBC’s WDPN-TV,12 its

President (and former Director of Engineering), Mr. Barry Fisher, conducted signal strength

8 See 2019 NPRM at app. C. 9 See 2019 FNPRM at 26-27 ⁋ 68. 10 See Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions,

Report and Order, 29 FCC Rcd 6567, 6725-26 ¶¶ 369-71 (2014). 11 See Assessment and Collection of Regulatory Fees for Fiscal Year 2013, Report and Order, 28 FCC

Rcd 12351, 12362-63 ¶ 30 (2013). 12 See LMS File Number 0000035792 (granted June 4, 2018) at “KJWP Request for Waiver Exhibit”. At

the time this application was filed, WDPN’s call letters were KJWP, hence the reference to KJWP in the

attached exhibit.

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surveys of UHF and VHF signals in a typical home in the Philadelphia market. The report he

generated is attached and clearly demonstrates the difficulty VHF signals have in overcoming

background interference, even where their signals are predicted to be strong.13 It is not the

interference from other TV stations that is the issue (which is measured by the noise-limited

contour used by the Commission to compute the fees to be paid by TV stations), but the general

environmental noise that adversely affects VHF stations in a dramatic way, while having far less

impact on stations operating in the UHF band.14

The issues with the proposed fee-metric are compounded for VHF stations which have

attempted to overcome the background noise by proposing power increases beyond the

maximum power levels usually accorded by the FCC rules to these stations.15 While these power

increases are done principally to boost the signal strength of the station in its core market to

attempt to achieve some comparability with UHF stations (though, even with increased power, it

is often difficult to achieve a comparable signal given the limitations of most home antennas –

see the statement of Mr. Fisher, attached), the power increases have the effect of increasing the

predicted reach of the noise-limited contour. The real effect on the reception of these stations by

a distant viewer is minimal given the limitations of VHF signals and, in some cases, the

received-interference from other VHF stations in nearby markets that have engaged in mutual

upgrades to increase their signal strength in their core service area. Yet each of these added

theoretical viewers in these expanded noise-limited contours counts in the Commission’s

determination of the regulatory fees to be paid by the station.

13 See Attachment #1. 14 Id. 15 See 47 C.F.R. § 73.622(f) which sets out the DTV power limits.

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While the impact of the fees is most pronounced on VHF stations, there are broader

questions of whether the population served really is the best way of assessing the regulatory fee.

While the Commission notes that population has served as the base for fees paid by radio,16 the

economics of the radio industry are much more dependent on over-the-air audience reach than

they are in TV. In radio, much of the listening is done in cars. TV viewing, by contrast, is most

often done in the home, and the majority of viewing is still done through MVPDs that make

programming available throughout the DMA. TV viewing thus is not as tied to the reach of the

station’s service contours as is radio.

Advertising buyers, too, tend to base their ad buying on decisions on the DMA in which a

station operates, rather than the over-the-air coverage of individual television stations. For

instance, MBC’s WFMZ, being located in Allentown in the northern part of the Philadelphia

market, is calculated to have more viewers than many of the other Philadelphia-market stations.17

But many of these viewers are in the New York TV market (or in other adjacent markets), and

not routinely considered by advertisers in their decisions whether or not to buy advertising on

WFMZ.

The impact of the policy change can be seen clearly by reviewing the fees paid this year

by MBC’s two Philadelphia market VHF stations. WDPN-TV, licensed to Wilmington, paid

$68,881 this year on the blended fee determination methodology, while it would have paid only

$54,000 on the DMA-based methodology.18 Next year, its fees were predicted by the NPRM to

go to $83,763 when fees are based 100% on population.19 WDPN-TV has recently constructed

new facilities increasing power to a power similar to the power of WPVI-TV in Philadelphia, a

16 See 2019 NPRM at app. F. 17 See 2019 Order at app. J. 18 Id. 19 2019 NPRM at app. C.

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VHF station that is already operating at a power greater than the maximum power routinely

granted to VHF stations. Thus, MBC expects that the fees for WDPN-TV will increase to

approximate the $100,613 that WPVI-TV will pay under a regulatory fee fully based on

predicted coverage. MBC’s WFMZ-TV in Allentown currently faces a situation worse than

WDPN-TV presumably because of its reach into the New York market. Its fees were $72,837

this year, increasing to $91,675 when the fees are computed solely on population.20 That

compares with Philadelphia UHF TV stations like WCAU (which paid $66,778 this year and will

pay $77,557 next year) and KYW-TV ($66,958 and $79,916).21 No one would claim that the

WDPN-TV and WFMZ-TV signals are superior or even comparable to those of the UHF

competition, yet the MBC stations are slated to pay substantially more in regulatory fees.

The Commission should adopt a fee assessment methodology that reflects the reality of a

VHF signal in a digital world. While there is no way to accurately compute the number of

viewers lost by VHF stations due to their inferior signals, the Commission can still recognize that

VHF station signals are not superior to those of the UHF stations in their DMAs. As the recent

incentive auction demonstrated, UHF stations are in much higher demand than VHF stations. So

as to not penalize VHF stations who try to remedy the technological inferiority inherent in a

VHF signal by raising their power to overcome the environmental noise, the Commission should

assess fees for VHF stations that put them on par with UHF stations in their markets. MBC

suggests using a methodology that averages the fee amounts assessed to the commercial full-

power UHF stations in a given market and then applies the average UHF fee as the fee to be

20 2019 Order at app. J. WFMZ-TV also operates as part of a 4-way channel share of its VHF signal.

While the other 3 stations are operated by nonprofit entities, if they had been for-profit companies, the

FCC would be collecting 4 times for the same 6 MHz of spectrum. 21 2019 Order at app. J.

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assessed to the VHF stations in the same market.22 This proposal is easy to apply, provides fee

relief where it is needed, and makes the regulatory fee assessment amount for VHF stations

better reflect the technological limitations of the VHF signal.

Under the current system, in many cases, fees are being disproportionally assessed on

parties who can least afford them, and on VHF stations with the worst actual over-the-air

reception. MBC has never been opposed to paying fair fees consistent with those paid by other

stations in its market. But these new fees impose a larger burden on these VHF stations without

adequate review of the policy basis for doing so. In assessing its fees, the Commission must take

into account the benefits that the parties who are paying them receive from their licenses. The

technically inferior VHF stations should not be charged more than UHF stations that operate in

the same market but are far more valuable simply because of the spectrum which they occupy.

The parties respectfully request that these fees be adjusted, either by returning to the DMA-based

fees, or by imposing lower fees than those that are proposed for VHF stations as outlined in

Attachment #2.

22 See Attachment #2 for an illustration as to what the fees would look like for VHF stations using this

methodology. The numbers in the attached chart were derived from the Commission’s fee computations

in the 2019 Order. Under this methodology, VHF stations in the Philadelphia market would be assessed

approximately $59,387 for FY 2020. The average fee for the full-power, commercial UHF stations was

computed by excluding the noncommercial stations in the market, one full-power station that currently

shares an LPTV channel, and WTXF, whose fees were understated and will be significantly increasing

after implementation of a construction permit for the maximization of its facilities to those more

equivalent to other UHF stations in the market.

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Respectfully Submitted,

MARANATHA BROADCASTING COMPANY, INC.

By: /s/ Barry Fisher

Barry Fisher, President

300 East Rock Road

Allentown, PA 18103

(610) 798-4080

barryf@wfmz.com

Date: December 6, 2019

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ATTACHMENT #1

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ATTACHMENT #2