spectrum auctions

Ion Media CEO Brandon Burgess says while his company is looking at the pros and cons of selling some spectrum, he’s doubtful it will and, what’s more, he questions whether the auction, planned for 2016, will ever take place.

But, says Paul Karpowicz, head of the company’s Local Media Group, “we haven’t made a decision on participating in the auction.”

CPB will spend $3 million to give public television executives access to expert advice on the upcoming broadcast spectrum auction. The extremely high value of spectrum as appraised by an Oct. 1 FCC report created a “considerable amount of confusion” among managers, said Michael Levy, CPB EVP. Previous estimates had been much lower.

The agency releases study for broadcasters on how its incentive auction will work and how much they could make from selling their spectrum in the auction in every TV market. Hoping to encourage widespread participation, the study also includes a letter from the IRS providing guidance on the tax implications of selling spectrum in the auction.

Seeking to entice reluctant broadcasters to participate in its planned incentive auction of TV spectrum, the FCC is distributing today estimates of what stations might be worth in the auction — market by market. Figuring that broadband carriers will pay a total of $45 billion to buy 100 MHz of TV spectrum, the FCC says a full-power station in Los Angeles could get as much as $570 million and those in New York could bring as much as $490 million. Stations  adjacent to major markets like Wilkes-Barre/Scranton, Pa. ($150 million), and Palm Springs, Calif. ($180 million), could also make out.

If the incentive auction of TV spectrum is successful in the United States, governments and regulators from around the world will take notice and may implement similar measures, according to NAB’s Rick Kaplan.  

Rick Kaplan, NAB EVP, responds to FCC Chairman Tom Wheeler’s remarks Tuesday in Las Vegas accusing NAB seeking to delay or derail his upcoming broadcast spectrum incentive auction. “We at NAB still believe this auction can be a success. NAB has worked very well with all other industries in this proceeding, even when we’ve disagreed with them.”

The two noncommercial stations in Los Angeles will give up 6 MHz of spectrum for the FCC’s auction and then share a single over-the-air channel. 

CPB will review its television Community Service Grant policies to clarify how to handle station revenues from the upcoming spectrum auction.

The Connecticut Public Broadcasting Network plans to relinquish the spectrum assigned to WEDW Bridgeport, one of four stations in its statewide network, in the FCC’s upcoming auction. Under its agreement with spectrum speculator LocusPoint Networks, the pubcaster received an undisclosed cash payout from LocusPoint and will share a portion of its future auction proceeds with the company.

The group goes to court over the commission’s decision to change the methodology used to predict local television coverage areas and population served, saying it could result in significant loss of viewership of broadcast TV stations after the FCC “repacks” TV stations into a shrunken TV band.

The FCC is looking to raise revenue — and the agency is in full pitch mode. The FCC is hoping to raise $20 billion by matching the broadcasters who are willing to sell at the lowest prices with the wireless carriers willing to buy at the highest. The spread between becomes the government’s commission check. The problem: the FCC is handicapping itself.

Last June the FCC released its magnum opus (all 484 pages of it) laying the groundwork for the spectrum incentive auctions that (in the FCC’s fondest imaginings) may occur as early as next year. The FCC’s Report and Order has now been published in the Federal Register. As a result, we now know that the rules adopted by the commission are set to take effect on Sept. 9.

Chairman Tom Wheeler says the commission will provide estimates this summer and will also distribute information to broadcasters explaining why they should consider participating in the auction.

The commission hires investment banker Greenhill & Co. to develop financial analysis and explain to broadcasters why participating in the auction might be in their interest.

A planned spectrum auction has caused concern that universities and states that hold public station licenses but are not primarily broadcasters may give up spectrum and use the proceeds for other needs.

The heads of the Association of Public Television Stations, the Corporation for Public Broadcasting and the Public Broadcasting Service say that the FCC’s plans for the upcoming spectrum auction could result in some communities losing public television service. They call that “a grievous error that risks breaking faith with the nation’s commitment to universal service for non-commercial educational television.”

Among NAB’s major beefs is that the auction regulations released June 2 don’t protect broadcasters from the possibility that they may get stuck with at least part of the cost for moving to new TV channels during the post-auction channel repacking process.  “It’s clearly unacceptable,” says NAB’s Rick Kaplan.

The full text of the 484-page document that will govern the FCC’s upcoming incentive spectrum auction is available here.

On Thursday, the FCC adopted rules to implement its broadcast television incentive auction and released three documents relating to those rules, as well as separate statements from four of the five commissioners. At the meeting, the commissioners noted that, when released, the Report and Order will contain a number of rule changes to implement the auction. Here are the major takeaways.

The Expanding Opportunities for Broadcasters Coalition gathered outside the FCC in Washington today to promote the FCC’s inventive auction. Concerned that a growing watchdog-group-organized protest over an FCC net neutrality proposal had “sucked the oxygen out of the auction, we wanted to put the oxygen back,” said coalition leader Preston Padden (left).

“On some levels, it’s an insult,” says one broadcast group representative of the planned April 22 half-hour meeting on the spectrum auction between the FCC chairman and representatives of the NAB, the TV networks, public broadcasters, network affiliate and station group representatives. “It will take half that time for everybody to go around and introduce themselves. What’s the point of dragging us in there?”

The commission reassures broadcasters that there will be no repercussions if they decline to talk about — or participate in — the upcoming spectrum auction.

Station groups tell the commission it should drop its plans to hold one-on-one meetings with stations to convince them to participate in the incentive auction. Such meetings could be construed as a “big stick” with possible FCC enforcement activity as a price for non-cooperation, they say.

The trade group’s EVP posts a blog urging FCC Chairman Tom Wheeler to make sure the commission won’t take any actions that would “harm broadcasters in unrelated proceedings to encourage participation in the [spectrum] auction.”

On the stump to promote participation in the FCC 2015 incentive auction, FCC Chairman Tom Wheeler said today the ability of broadcasters to cash in on their spectrum will not come again. “That this is a once-in-a-lifetime opportunity is not hyperbole,” he said in a speech at the Computer History Museum in Silicon Valley. Wheeler delivered much the same message yesterday at CES in Las Vegas.

In his appearance at the CES yesterday, new FCC Chairman Tom Wheeler said: “I think there has never been a more risk-free opportunity for an incumbent service provider to morph into the new digital reality than what the spectrum incentive auction offers. I hope broadcasters begin to see that.”

At a meeting at CPB’s headquarters in Washington, Harry Hawkes of Booz & Co.’s media and technology practice told CPB board members that if the FCC goes ahead with plans to clear 120 MHz of spectrum for use by mobile devices, 110 to 130 pubcasters will need to shift their channels due to repacking even if they don’t participate in the auction.

Chairman Wheeler says he expects the commission would be ready to vote on major policy regulations for the spectrum auction by the spring of that year. Reaction from industry representatives favorable.

Dish Network Corp. will compete against smaller wireless carriers and individual investors in the FCC’s auction of spectrum scheduled for January. On Jan. 22, the FCC will auction off the so-called H Block frequencies in the first opportunity that the commission has had for companies to acquire new spectrum since 2008.

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.

Many in Washington, and beyond the Beltway for that matter, are anticipating the upcoming spectrum incentive auctions set to take place in the coming year or so. While these auctions could stand to raise billions of dollars for the U.S. treasury and broadcasters, there are also many issues that need to be worked out before any auction takes place.

A study by the Expanding Opportunities for Broadcasters Coalition and the Consumer Electronics Association, says that putting bidding restrictions on AT&T and Verizon could cost the FCC almost $6 billion in revenue from the upcoming spectrum incentive auction.

Broadcasters say yes and urge the commission to delay it until there are adequate safeguards for broadcasters and consumers. On the other hand, FCC Senior Adviser Rebecca Hanson says the commission is acting methodically and responsibly.

Democratic senators Charles Schumer and Kirsten Gillibrand expressed concern to the Secretary of State that the FCC may have to reduce coverage areas of stations along the New York-Canadian border as a result of spectrum repacking, “thereby depriving American citizens of access to the signals of their favorite stations.” The senators want the State Department to assign responsibility for conducting the coordination with Canada and “get the process under way without delay.”

The Corporation for Public Broadcasting, PBS and the Association of Public Television Stations are jointly opposing a proposal by the FCC’s Office of Engineering and Technology to use a new software program to analyze television coverage and interference data. The proposal was floated by the commission in February and intended to update the analytical tools the commission will use in preparing for the 2014 broadcast spectrum auctions.

1. The auction is voluntary — really. The FCC wants to clear up to 120 MHz of TV spectrum — or 20 TV channels in the upper UHF band— so […]