Spectrum Auction, DirecTV, The Donald

Broadcasters salivating over potential windfalls from the FCC incentive auction next year have much to be thankful for. They are on a roll in Washington.

Last week, the FCC loosened its channel sharing rules. Stations can now wait until after the auction to make their sharing arrangements, the agency ruled, although they still have to inform the FCC of their intentions before the auction. The FCC said the move would encourage more stations to participate in the auction.

The Expanding Opportunities for Broadcasters Coalition of spectrum sellers had asked for the adjustment. “The new rules will greatly increase the feasibility of broadcasters entering into sharing arrangements,” said EOBC head Preston Padden.

Also, to the EOBC’s delight, the U.S. Court of Appeals in Washington removed a big obstacle to the auction taking place early next year. A three-judge panel rejected complaints from the NAB and Sinclair that the FCC plan for repacking the TV band after the auction would degrade the coverage and service of the stations that choose not to participate in the auction.

With a lot of money tied up in TV spectrum that is not generating much revenue right now, EOBC members want the auction to take place as soon as possible.

This week, word is out that the FCC may vote at its July 16 meeting to dump the dynamic reserve pricing mechanism in the reverse auction that the EOBC feared would suppress spectrum prices. Also, in that notice, the FCC may open up the auction process to some degree so that spectrum sellers can follow the action more closely and make smarter moves.

The sellers aren’t getting everything they wanted. The agency is apparently not going to modify its formula for the opening bids as the EOBC had suggested — a move that would have significantly raised them and, it is presumed, the final prices for spectrum.

But still, the EOBC, with a late assist from the NAB, is making progress in tweaking the auction rules in ways that should translate to more money for the sellers.

No one know how much money, of course. But it’s always fun to play with the numbers. Last week, the EOBC released a study from economist Peter Cramton that said the FCC would pay $35 billion to clear 126 MHz of spectrum and then turn around and sell it to wireless carriers in a second auction for $85 billion. That means the U.S. treasury would net $50 billion.

Cramton may have to adjust downward the $35 billion since it was based on the FCC’s making the EOBC-recommended changes to the opening bid formula.

But let’s just say the $35 billion is dead on. Cramton also predicts that between 250 and 500 stations will participate in the auction, depending in large part on how much channel sharing goes one. So, that means that the average price the FCC would pay for stations would be between $72 million  and $144 million each. That is enticing.

By the way, if the $50 billion is even remotely true, the government should be willing to come up with more money for the non-participating broadcasters who will have to move to new channels during the repacking. Right now, the government has set aside $1.75 billion to reimburse broadcasters. It’s far from enough.

Can DirecTV Keep A Promise?

In 2003, General Motors agreed to sell a controlling interest in DirecTV to News Corp. for $6.6 billion and the two parties spent much of the year trying to win the FCC’s blessing. Among the promises the parties made is that DirecTV would “as early as 2006 and no later than 2008” offer a “seamless, integrated package” of local broadcast signals in all 210 TV markets.

Here we are in 2015 and DirecTV has still not made good on that promise. The satellite operator is not providing so-called local-into-local service in 11 DMAs at the bottom of the Nielsen list — Bowling Green, Ky. (183); Grand Junction, Colo. (185); Cheyenne, Wyo. (196); Caspar, Wyo. (197); Ottuma, Iowa (201); Victoria, Texas (203); Helena, Mont. (205); Presque Isle, Maine (206); North Platte, Neb. (208); Alpena, Mich. (209); and Glendive, Mont. (210).

It’s unacceptable. These are the kinds of markets where local TV news is most vulnerable. Without satellite carriage, the stations are cut off from significant parts of their audiences. They also lose leverage in retrans dealing with other MVPDs.

This is particularly important to Gray Television, which claims the No. 1 news stations in six (soon to be seven) of those 11 markets.

Over the years, ownership and control of DirecTV has shifted about. News Corp. bailed out in 2008. Now, it’s back before the FCC with a proposal to merge with AT&T in a deal valued at $48.5 billion.

So, wisely, broadcasters are seizing the opportunity. The NAB along with the Big Four affiliate boards have asked the FCC to condition its approval of the deal on DirecTV making good on its 2003 promise.

“While the markets that have been left behind by DirecTV are all small, their residents are just as important as those in every other market in the country,” the affiliate boards said in an FCC filing this week. “And these residents deserve access to local programming, local news, local weather, and local political and emergency  information just like the residents of larger markets.”

I hope the FCC hears the broadcasters and imposes the condition. Maybe this time the new owner of DirecTV will keep the promise.

Trump Has No Place On NBC

When I heard Donald Trump was running for president on Tuesday, my first thought was to check to see if the FCC “equal-time” rule disqualified him from appearing on another cycle of Celebrity Apprentice.

Then, I saw a clip of his announcement speech on the NBC Nightly News and decided NBC should disqualify him immediately from all things NBC.

“When Mexico sends its people, they are not sending their best,” Thump ranted. “They are sending people that have lots of problems and they are bringing those problem with us (sic). They are bringing drugs. They are bringing crime. They’re rapists. And some, I assume, are good people.”

In other words, most Mexican immigrants are drug-crazed or drug-dealing rapists. Let’s put that plank in the Republican platform.

I don’t know what is in Trump’s heart, whether he is a bigot or simply a right-wing provocateur and demagogue. Given all the idiotic noises he made about Obama’s birthplace, I suspect it’s the latter. But I’m not sure it matters. Loud talk like that can infect weak minds and lead to the kind of tragedy we saw in Charleston yesterday. It’s dead wrong.

Instead of worrying about rehabilitating Brian Williams (are we tired of that story, yet?), NBC ought to be worrying about cutting all its ties to Trump. That would include not only Apprentice, but also the Miss Universe joint venture.

There has not been a huge outcry over Trump’s remarks so this would not be a case of NBC succumbing to outside pressure. This would be a case of NBC doing the right thing. Yes, Trump has the right of free speech. But Brian Roberts and Steve Burke have the right of free association.

And it’s not like NBC would be silencing Trump. By force of personality and his $8.6 billion in net worth (or so he boasts), he will always have a platform from which to spew.

Harry A. Jessell is editor of TVNewsCheck. He can be contacted at 973-701-1067 or [email protected]. You can read earlier columns here.