In Broadcast - December 2014 - 58

I N T E R N A T I O N A L

WWW.INBROADCAST.COM | ISSUE 38 - DECEMBER 2014

N E W S

InUSA

Broadcast Spectrum "
Auction Delay
By Michael Grotticelli
Contributing Editor

I

58

t seems the National Association
of Broadcasters (NAB), the
lobbying trade organisation for
broadcasters in the US, is more
powerful than many of us might
think. But, is the NAB doing right
by its members by exhorting them
not to participate in the upcoming
auction of broadcaster channels
for other wireless communication
uses?
For the past three years (at least)
the industry has been debating the
merits of a government auction of the
airwaves now used by broadcasters
to mobile phone companies and
others. Now, thanks to an intense
lobbying effort by the NAB, and
more than a few lawsuits to stop
it, the Federal Communications
Commission (FCC), responsible for

Transmission spectrum channel usage

Auction delay: Federal
Communications Commission

hosting the auctions, said it would
delay the proceedings another six
months, until 2016.
The auction was supposed
to begin in mid-2015 and bring
several billion dollars (some say as

...Many have
called it the
largest and most
complicated sale of
airwaves that the
commission has
ever attempted.

"

much as the preliminary estimate
is that the auction could bring in
US$45 billion) to the government's
coffers. Proceeds from the auction
are expected to contribute heavily
to the cost of a planned US$7
billion nationwide public safety
communications network. Many
have called it the largest and most
complicated sale of airwaves that
the commission has ever attempted.
After an extensive marketing and
promotion campaign run by the NAB
to keep stations from "getting out of
the business of broadcasting," the
commission said it needs more time
to attract more television stations to
participate. To be successful, some
broadcasters must agree to give up
their assigned channel or move their
signals to new frequencies on the
wireless spectrum in exchange for a
portion of the proceeds of their sale.

Mobile Spectrum

Broadcast stations that do not
participate in the auction could
have their spot on the broadcast
spectrum moved anyway (also
known as "repacking of channels")
to help create contiguous blocks
of airwaves for sale to mobile
phone companies.
Thanks in part to the NAB's efforts,
most broadcast stations afﬁliated
with the four major networks are
not expected to participate in the
auction, and the trade association
said in its lawsuit challenging the
sale that the initial rules laid out
by the commission would cause
some stations to lose some of their
coverage area and viewers.
Gary Epstein, the Chairman of the
commission's Incentive Auction Task
Force, wrote in a blog post on the
FCC website, that "given the reality
of [the] schedule, the complexity
of designing and implementing the
auction, and the need for all auction
participants to have certainty well
in advance of the auction, we now
anticipate accepting applications for
the auction in the fall of 2015 and
starting the auction in early 2016".
Of course, Dennis Wharton,
Executive Vice President for
communications of the broadcasters'
association, said, in a statement,
that it was not responsible for the
delay. He told the New York Times,
"it's more important to get the auction
done right than right now. Given its

complexity, there is good reason
Congress gave the FCC 10 years
to complete the proceeding".
Wharton has also told the Wall
Street Journal: "It seems a stretch to
suggest that a large market ABC or
CBS afﬁliate will go out of business
just so a wireless company can have
more spectrum."

Auction Proposal

It's generally acknowledged that
the commission could vote by
the end of this year to release for
public comment a proposal for
how the auctions will be held. The
agency will also soon release for
comment a proposal to set aside
one vacant television channel in
each market for use by unlicensed
products (wireless routers, wireless
microphones, and some medial

Funding public safety
communications

telemetry devices).
Indeed, it might be time for many
to see the writing on the wall. Overthe-air terrestrial video delivery is a
fading relic of a bygone era. The
Internet is a far more efﬁcient way to
serve subscribers. If the FCC does
not get the participation it needs
to fulﬁl its ﬁnancial goals with the
auction, it could begin to mandate
certain terms to make them comply,
which virtually every broadcaster is
against. It's better to have a choice.
So, the NAB is telling stations not
to take the money and run, but in
some cases, the group might not
be giving the right advice to its
member stations.
The Wall Street Journal reported
that a station in Detroit, Michigan,
WADL-TV might be able to sell its
spectrum for about US$170 million.
Given the state of the economy in
Detroit, that sum has got to be many
times more valuable than the very
land the station sits on. Stations
in larger markets, like Los Angeles,
could get close to US$600 million
(per station).
"It might be time to take the chips
off the table," Kevin Adell, CEO and
Owner at WADL-TV, an independent
station, told the Wall Street Journal.
The NAB should understand he,
and others like him, might have the
right idea.

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