channel sharing

As stations look to make channel-sharing deals, unfortunately, there is no one right price, no equivalent to the cash flow multiple that many stations buyers/sellers look towards. The final negotiated price will depend upon a number of local factors all leading to the relative negotiating positions of the parties. Here’s a outline.

Connecticut Public Broadcasting Network will receive $32.6 million in auction proceeds through a complex three-way spectrum deal involving two of its stations — WEDY in New Haven and WEDW in Bridgeport. Both stations will continue broadcasting under channel-sharing arrangements, though details are confidential due to a non-disclosure agreement. Spectrum relinquished by WEDY, which will share channels with WEDW, generated $18.9 million, according to the FCC’s April 13 announcement of auction results.

The action today gives more sharing flexibility to TV stations that relinquished spectrum in the incentive auction, as well as to LPTV and TV translators, to help ensure continuity of service to viewers.

As part of its pilot project for meeting transparency, the FCC has released the text of an order on its March agenda to expand channel sharing outside of the auction context. The draft order will fill in many holes in the current channel sharing regime, but it still includes several restrictions on the type of channel sharing agreements that will be permitted.

They have FCC licenses, programming contracts and everything else you need to be a broadcaster, except spectrum, having sold it in the FCC’s incentive auction. So, now they are looking to find spectrum somewhere else or sell off their remaining assets in a second post-auction payday. There’s opportunity too for living broadcasters who wish to channel-share or lease the zombies a subchannel.

Stations that auctioned their spectrum still hold their broadcast licenses so they may continue broadcasting — with full must-carry rights — by leasing a channel from another station. And stations that did not auction their spectrum can make money by leasing channels.

Stations deciding to sell their spectrum in the FCC’s incentive auction and cease their business operations will be required to treat the event as a one-time sale or loss, the real accounting challenges will arise for stations that want to sell their spectrum but continue operating their business. They have options including channel sharing, joint ventures and license sharing. The differences between these interpretations have far-reaching consequences.

An Aug. 11 test in Syracuse, N.Y., of the Evertz 3480TXE MPEG-2 encoding and stat-mux platform demonstrates that it’s now possible for a pair of stations to share a channel without giving up existing services that viewers are accustomed to seeing. The test took place at the PBS Member Station Joint Master Control pictured above.

Channel sharing offers an alternative for some broadcasters that would like to cash in on the FCC’s incentive auction, but continue broadcasting. It’s also an opportunity for other broadcasters looking to generate extra revenue by leasing excess spectrum. Here are some items vital to any channel sharing contract. Publisher’s Note: Executive Outlook is a new, branded feature of TVNewsCheck.com. It is offered free today as a sneak preview of the kind of in-depth content soon to be offered in the our Premium Member Center.

CEO Peter Liguori tells analysts today that his company is discussing with Fox, Univision and Ion how best to approach the FCC’s spectrum auction.

If you have planned your summer vacation plans around the FCC’s TV Channel Sharing Webinar that was originally scheduled for today, July 22, we hope you can get your deposit money back. That’s because the commission has announced that the webinar is being postponed three weeks and a day. According to a public notice released July 21 (talk about last minute), the webinar is now slated to occur on Thursday, Aug. 13, from 3 to 4 p.m. ET.

The commission’s Incentive Auction Task Force and the Media Bureau are teaming up to present a one-hour webinar to go over various aspects of the channel sharing bid option. That’s the option that could let folks sell their current spectrum back to the Feds while staying in the broadcast business by bunking up with another licensee on that other licensee’s channel. The webinar is scheduled for 2-3 p.m., Wednesday, July 22.

Responding to concerns of broadcasters who plan sell their spectrum in the incentive auction next year, the FCC said they may wait until after the auction before entering into channel-sharing arrangements so they stay in the broadcasting business. The action may encourage more stations to participate in the auction and help preserve “independent voices” in broadcasting, the FCC said.

In a petition to the FCC, the Expanding Opportunities for Broadcasters Coalition is asking the agency to reconsider the channel sharing plans it laid out in its Incentive Auction Report & Order. The Coalition says the rules limit broadcasters’ flexibility and could cause them to reconsider the channel sharing option.

Does the report on the first formal tests of a TV channel-sharing arrangement really say what FCC Chair Tom Wheeler says it says? You make the call.

Los Angeles stations KLCS and KJLA have concluded their channel sharing trials, and the results are good news for the FCC, which hopes to auction off a large chunk of the broadcast airwaves to mobile carriers next year. Their report, released to the public on Friday, found there are few technical barriers to two broadcasters sharing the same 6 MHz channel.

The TV airwaves over Los Angeles got a bit more crowded last month as two stations tested whether sharing the same broadcast channel is feasible. Their report could determine whether the FCC’s upcoming incentive auction succeeds.

The FCC and the CTIA-The Wireless Association believe that having two TV stations share the same 6 MHz of spectrum currently used by just one station will provide broadcasters what they need to do business and open up much desired spectrum for the wireless industry. Right now they are finding out of it can successfully be done.

Patrick Butler, president-CEO of the Association of Public Television Stations: “We are certain that the overwhelming majority of public television stations will not be participating in the incentive auctions, and will instead hope to employ the technological advances at hand to improve and expand their essential public service missions in America’s communities.”

Plenty, say broadcasters.The impetus comes from liberal foes of big media, cable and satellite operators trying to slow the growth of retrans payments and possibly Wheeler’s own effort to promote broadcasters’ participation in the spectrum auction. “He’s trying to break apart broadcasters,” says one station group executive.

FCC Chairman Tom Wheeler blogs: “I’ve seen the future, and it’s using 50% less bandwidth to produce a picture with increased quality of up to 300%. I just completed a tour of KLCS, a public broadcaster in Los Angeles. On my visit I saw KLCS putting out 1 HD stream and seven standard-definition streams of programming on its current allotted channel of spectrum, what they call multi-casting. What’s really exciting is that as part of the pilot program with KJLA, KLCS will test broadcasting two full HD streams of programming over the same channel. If the pilot works as engineers expect it will, this could be a game changer for the concept of channel sharing.”

The FCC, as had been expected, approved a CTIA plan to partner with two Los Angeles TV stations to conduct a pilot project with the aim of showing that the stations can share the same broadcast spectrum.

The two Los Angeles stations, in conjunction with CTIA, ask the FCC to let them conduct a series of tests that will culminate in KLCS “hosting” KJLA’s content and transmitting a shared stream that will combine the two stations’ primary and multicast content.

In his first policy address since becoming FCC chairman, Tom Wheeler says channel-sharing arrangements and must carry would let broadcasters cash in on the incentive auction and continue to stay in business.“That to me seems to be a pretty good deal,” he said Monday at Ohio State.

A spokesman for the Information Technology and Innovation Foundation (ITIF), a nonprofit public policy think tank based in Washington, has suggested that the FCC should require any broadcaster that does not give up spectrum for auction to share or co-locate channels.