cash for spectrum

TV broadcasters look at the FCC’s recent drive to move them off frequencies and put their political advertising rates on the Internet and draw one conclusion: The FCC has it in for television. And broadcasters are fighting back by publicly airing that charge in the midst of the ongoing policy debate on freeing up airwaves for wireless broadband.

By letting broadcasters share channels and not relinquish must-carry rights, the commission hopes to entice weak stations to double up (or even triple up) on channels, turn over spectrum to the FCC and participate in the voluntary “incentive” auction.

That’s the word from FCC Media Bureau Chief Bill Lake who says making public the algorithm from which they are derived is enough since the commission continues to “refine our approach to that as we move into the [spectrum auction] rulemaking.” For all that’s going on at NAB 2012, click here.

Congress granted FCC Chairman Julius Genachowski’s wish for the power to hold an airwaves auction that will pay broadcasters to abandon some of their frequencies, but turning that wish into reality is going to be a challenge. The agency is trying to figure out how to design and conduct the complex auctions, which for the first time will pay people to give up valuable airwaves.

The Advanced Television Broadcasting Alliance is calling for the immediate release of the FCC’s AOM (Allotment Optimization Model) that FCC Chairman Julius Genachowski said would be released upon authorization to conduct spectrum auctions. That authorization came in the recently signed “Middle Class Tax Relief and Job Creation Act.”

Ruth Milkman, an aide to FCC Chairman Julius genachowski, is tapped to oversee six others on the new Incentive Auction Task Force.

Washington communications attorney John Hane walks us through how the just-authorized broadcast TV spectrum auction may play out. He explains what the FCC has to do, how it may proceed, the vagaries of the whole process and points out what broadcasters should be wary of.

When it comes to parting with their spectrum, many broadcasters have the same attitude Charlton Heston had when it came to his rifle: The government can pry it from their “cold dead hands.” Even though the potential cut for broadcasters from the sale is $1.75 billion, there doesn’t seem to be a whole lot of excitement about the idea.

The Senate and House on Friday passed major payroll tax legislation that included approval for the FCC to auction off TV broadcast spectrum to help pay for the cost of the extended unemployment benefits. Broadcasters who put their spectrum up for auction will share in the proceeds. However, for TV broadcasters who chose not to give up their spectrum, the measure contains safeguards against their suffering any loss of service.

With the passage of legislation authorizing incentive auctions of TV spectrum for wireless broadband use, broadcasters scored a victory in getting numerous safeguards included. Good job. But if the FCC, broadcasters and broadband proponents could have found a way to work together, they could all have been winners. They could have found a plan that produces the extra spectrum that’s needed for broadband and improves rather than degrades broadcasting service.

The Senate approved the $143 billion measure on a bipartisan 60-36 vote minutes after the House approved it by a sweeping 293-132 vote. Obama is expected to sign it shortly after returning from a West Coast fundraising swing. Of the $30 billion cost of the extended unemployment benefits, half would be paid for by government auctions of parts of the nation’s broadcast airwaves.

Broadcasters worried early in the debate that they might be forced to give up spectrum. But, thanks to Rep. Greg Walden, a former broadcaster, they pretty much got everything they wanted. The bill takes care of broadcasters that choose to hold onto spectrum, making sure the FCC makes every effort to preserve TV station coverage areas and population reach. No station will be forced to move to VHF. To help broadcasters relocate, $1.75 billion is set aside in the bill to cover costs.

RBC Capital Markets analyst David Bank says it would be smart business for a lot of independently owned stations to go ahead and make a deal to sell their spectrum back to the FCC. He found several cases where stations recently were sold for less than the owner could have received by accepting just 25% of what wireless providers are paying for spectrum.

In a challenge to the FCC’s authority, AT&T said on Friday that Congress, not the commission, should set the conditions for proposed auctions of broadcast television spectrum.

FCC Chairman Julius Genachowski said on Wednesday that he has received bipartisan support from a group of U.S. senators for so-called “incentive” auctions of spectrum without legislative restrictions.

A bipartisan quartet of U.S. senators has fired off a letter to Senate leaders Harry Reid (D-Nev.) and Mitch McConnell (R-Ky.) that objects to certain elements in the House bill that would authorize TV spectrum incentive auctions, among other things. A major sticking point is the failure of the House to leave enough room for unlicensed devices.

The chief architect of the FCC’s National Broadband Plan says the incentive auction of TV spectrum is unlikely to produce much spectrum for wireless broadband or money for the federal treasury. Why? NAB-backed provisions designed to protect broadcasters in the authorizing legislation will expose the auction to crippling litigation. “Congratulations to [NAB President] Gordon Smith,” he says. “He did a great job. He did the job he was hired to do…. But let’s not kid ourselves: That’s not putting the United States first.”

On Saturday, the Senate adopted a two-month extension of the payroll tax cut that does not include any incentive spectrum auction provisions. And the House is expected to pass the same bill next week.

A Republican-backed payroll tax and jobs bill with TV spectrum auction language attached won House passage last night. But many hurdles still stand in the way of it becoming law. President Obama has said he would veto the legislation as it now stands. Still, FCC Chairman Julius Genachowski, who has championed the reallocation of TV spectrum to wireless broadband, called the House vote a “major achievement.”

The Walden legislation that was approved by the House Communications Subcommittee today would make spectrum auction participation voluntary and also contains provisions sought by NAB guaranteeing that stations’ service areas will remain unaffected by the channel reassignments or “repacking” that will occur in connection with an auction.

Lawmakers keep hoping that they can collect big bucks by auctioning off wireless spectrum. They can’t.

Yes, says Jonathan Spalter, chairman of Mobile Future, because demand for data services is soaring. No, says Barbara Cochran of the University of Missouri School of Journalism, because it will hurt TV stations.

The FCC’s desire to auction TV spectrum to aid wireless broadband and generate revenue is now centered on a House-Senate effort to reduce the country’s budget deficit. Broadcasters, led by NAB, are concerned that the Super Committee version of the incentive auction will lack sufficient protections for those TV stations that choose not to participate in an auction. So, NAB and other broadcast lobbyists will be working hard over the next two months to make sure that whatever incentive auction provision emerges addresses the industry’s concerns.

The fight between the NAB and the FCC over spectrum auctions is ugly. The two groups should be working together for the common good — that is, enhancing broadcasting as a strong, free and universal service and, at the same time, freeing up some additional spectrum for wireless broadband. Let me offer a compromise, a new National Broadband/Broadcast Plan. The NAB and the FCC would persuade as many stations as possible to give up their channels with the promise of a big pay day. And then the FCC would use a portion of the freed up spectrum — let’s say about a third — to improve broadcasting by giving the remaining stations more room to breathe.

The congressman is ticked at Julius Genachowski, saying the FCC chairman hasn’t given him a “substantive response” to his questions about the proposed spectrum auctions.

The FCC has been pushing for a while to get some 120 MHz of spectrum from the TV broadcasters and it sell it to the highest bidder. The NAB is opposing these plans and warning that it could lead to the closure of some 210 of its member’s stations. But the impact could be even greater on the country’s low-power TV stations, some LPTV operators fear. Close to 3,500 LPTVs would be affected by the spectrum changes, according to NAB estimates.

Sen. Harry Reid’s debt reduction proposal would permit the FCC to conduct incentive auctions of TV spectrum and share the proceeds with broadcasters who give up spectrum, but doesn’t have safeguards that broadcasters want. NAB is lobbying against the plan, calling it “about as big a threat as there is in terms of the future of our business.”

A new analysis of the FCC’s National Broadband Plan by the National Association of Broadcasters finds that a minimum of 210 full-power TV stations could go dark and that 40% of all TV stations in U.S. could either leave the business or be assigned a new channel. It also says stations in the top 10 markets could be severely impacted, with “Northern Border” stations in Detroit, Buffalo, Cleveland and Seattle threatened. NAB calls on the FCC to immediately make public its analyses of the plan’s potential negative impact on viewers of free and local television.

The Senate bill authorizing FCC TV spectrum auctions is raising red flags after an amendment was added that makes it unclear that such auctions be entirely voluntary for broadcasters. Another is that the FCC is not required to protect sufficiently those broadcasters that choose to hang on to their spectrum from increased interference and loss of service area.

It’s looking increasingly likely that Congress may authorize the FCC to hold incentive auctions as soon as this summer as part of debt-ceiling legislation now in the works. NAB says it is “working hard to ensure that spectrum-related provisions would include replication and interference protections for the vast majority of TV stations that will choose to remain in business.”

Rep. John Dingell is skeptical of the FCC’s plan to auction off up to 120 MHz of the TV spectrum to wireless broadband providers and he has asked the commission for answers to a series of questions by June 27.

The FCC is trying to entice the broadcasters to surrender some of their spectrum voluntarily, by promising to give them a portion of the subsequent auction proceeds. But to do that, the FCC first needs an OK from Congress. NAB President (and former U.S. senator) Gordon Smith has helped broadcasters successfully tamp down any thought of requiring TV stations to give back their spectrum licenses. Broadcasters are shoring up support for their position and making doubly sure any spectrum legislation contains language that will protect their interests.

FCC Chairman Julius Genachowski told a Telecommunications Industry Association audience in Dallas Thursday that there should be no more debate about whether there is a spectrum crunch that requires freeing up more spectrum.

It has been to goal of Congress to establish a national emergency interoperable communications system for first responders, ever since the events of 9/11 exposed the weaknesses in the system. A new bill will address that issue, and provide for the voluntary auction of spectrum by willing TV stations. NAB was conditionally pleased with the bill.

Sen. Jay Rockefeller (D- W. Va.) says he wants to get an incentive auction/emergency communications network bill passed by June, and certainly before the 10th anniversary of 9/11. But he also says broadcasters will not be forced off spectrum in the process.

The Consumer Electronics Association, which has been cranking up its campaign for broadcast spectrum via its blog and new studies, has created a “spectrum crunch clock” that claims to tally the “lost opportunity costs to the U.S. economy and consumers with every minute we delay responsibly managing our nation’s spectrum resources.” NAB calls it more of a crock than a clock.

In its comments on the FCC’s proposals on channel-sharing, spectrum “repacking” and improving VHF transmissions, CBS has taken a slightly less adversarial tone than the NAB, group owners representing hundreds of TV stations and state broadcast associations. And since it says it is not going to be selling its spectrum, or planning to share it with other stations, CBS put an emphasis on the FCC making sure those left behind are still in control of their own destiny.

I’m of the opinion that there isn’t that big a divide between the FCC and NAB’s positions. And I think all the posturing and threats will end as soon as Genachowski and the NAB can agree on how much stations owners should receive for giving up their claim on what used to be thought of as the public’s property.

CEA and CTIA are composing letters, commissioning surveys and writing white papers. FCC Chairman Julius Genachowski is giving speeches at NAB 2011 in Las Vegas. And various individuals are testifying on Capitol Hill. They all have the same objective — the capture of 120 MHz worth of television spectrum to repurpose for wireless broadband. On the Hill, WGAL Lancaster, Pa., Chief Engineer Bob Good mounted a defense.

As part of an NAB Show panel on the FCC’s spectrum plans, Post-Newsweek President Alan Frank says the proposal to auction spectrum to aid broadband  is not so much how such a voluntary auction will affect the minority of broadcasters who choose to participate in it, but rather how it will affect the majority who choose not to. And then there’s that word “voluntary.” “I had the honor of serving in the Army and I understand voluntary,” Frank said. Responding was FCC Media Bureau Chief Bill Lake, who promised that it was not the FCC’s intention to degrade TV service in any way.