spectrum auctions

The FCC Chairman says that for mobile DTV to thrive, broadcasters will need some of the broadband spectrum that his incentive auction will provide.

Given the architecture of both delivery systems, Verizon CEO Lowell McAdam says “it would be hard” for wireless to replace broadcast ‘s big-screen, HD in-home viewing experience. However, between the video streaming capability Verizon does have, and protocol under which “we work out rights issues with local broadcasters,” McAdam says he envisions a streaming service that would let viewers in particular markets vote for the big events they want to see on mobile — and deliver it to them.

“It’s not the FCC’s job to convince stations to go out of business,” Rick Kaplan, NAB EVP of strategic planning said in a Monday NAB Show panel. “The FCC should make the rules [of the auction] clear and easy, but the market dictates participation.” FCC adviser Gary Epstein said guaranteeing that non-participating stations retain their coverage areas will pose “some interesting challenges.”

In a letter to the FCC, Michigan’s 14 members of the House of Representatives and two Senators said coordinating the auction with Canada and Mexico will “preserve opportunities for broadcasting,” as well as maximize the amount of nationwide spectrum to meet the nation’s demand for licensed mobile wireless broadband.

The sales bounty is coming as the government embarks on an ambitious but untested plan to entice flailing stations to put their spectrum up for auction.

For the FCC’s spectrum auction to succeed, NAB’s Rick Kaplan says, the commission needs to make it “as easy as pie” by answering such basic questions for broadcasters that may wish to participate as: “Does the FCC want a volunteer in my market?; How much might I get paid?;  Where do I go to participate; and how exactly is it going to work? None of those questions have been answered, and the … clock … is ticking,” he says.

Preston Padden, head of the Expanding Opportunities for Broadcasters Coalition, says the FCC is considering language for its upcoming spectrum auction guidelines that would give lower powered Class A stations “a small percent of what a full-power station gets, and that is crazy.” He adds: “The metric should be the contribution to clearing the spectrum that the FCC wants to auction, not station ratings, nothing else.”

Last week’s public notice from the FCC Office of Engineering and Technology (OET) proposing material changes to OET Bulletin No. 69, which is used to evaluate DTV coverage and interference, will introduce uncertainty into the incentive auction process and undermine its ultimate success, NAB told the commission.

The commission says the new website “provides easy access to a range of useful information and resources that will help broadcasters and other stakeholders make more informed business decisions about participating in the incentive auction, which the FCC anticipates holding in 2014.”

In an effort to coax otherwise reticent TV broadcasters to join in the public discussion about the commission’s plans for incentive auctions, the Media Bureau has issued an unusual public notice providing “additional guidance” relative to the fine art of filing comments anonymously.

Congress appears willing to help save LPTV stations, but the FCC has not been as committal to protecting what many see as a valuable resource for millions of Americans.

The FCC has granted a request by the NAB and CTIA — The Wireless Association to extend the deadlines for comments on the commission’s notice of proposed rulemaking on how best to handle the proposed broadcast spectrum auctions. The FCC has moved the deadlines for comments and replies from Dec. 21 and Feb. 19, 2013, respectively, to Jan. 25 and March 26.

Once the “reverse” and “forward” auctions have been completed and the broadcast TV industry has been repacked, the FCC will finally be able to reconfigure the vacated UHF spectrum for mobile. But determining, now, precisely how that reconfiguration will ultimately look, then, poses a unique challenge in view of the number of unknowns currently in play.

The NAB and The Wireless Association have jointly asked the FCC for a one-month extension, from Dec. 22 until Jan. 25, 2013, of the deadline for filing comments in response to the commission’s notice of proposed rulemaking on how best to handle the proposed broadcast spectrum auctions; expected to be held sometime in 2014.

President-CEO Colleen Brown tells analysts “we monitor how much of our spectrum we are using, and we are completely full-up. So … economically, I can’t see that there is a way — we’ve run this many different ways — to participate.”

Given that the volume of issues to be addressed in the FCC’s Notice of Proposed Rulemaking on incentive auctions  is so great, and there is literally no way any individual party could cover them all, the best chance for a well-informed outcome in this proceeding is for the FCC to hear from a large number of commenters who, cumulatively, will hopefully touch on most of the key issues in their comments and reply comments.

The FCC announced that the preliminary TV channel sharing rules inits Report and Order in the Innovation in Broadcast Television Bands proceeding will become effective on June 22. The rules establish the basic framework by which two or more full-power/Class A television stations can voluntarily choose to share a single 6 MHz channel. Channel sharing is integral to clearing the television broadcast spectrum so that the FCC can auction it for wireless broadband as called for in the National Broadband Plan.

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.

If the FCC’s thirst for broadcast spectrum has become so intense that it is willing to sacrifice fundamental fairness and “widows and orphans” to get it, all broadcasters need to be looking over their shoulders for the next regulatory lightning bolt encouraging them to also “volunteer” their spectrum. Like death and taxes, it appears the FCC is determined to make surrendering spectrum for the auction an unavoidable fact of life (and death).

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.

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.

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.

The compromise legislation would generate savings from government sales of parts of the broadcast spectrum to wireless companies. The spectrum auction is supposed to raise about $15 billion — even after $7 billion would be spent for a new communications network for emergency workers. A vote is expected Friday.

CEO David Smith says: “There’s a fundamental disagreement between the Democrats and Republicans” over spectrum auction legislation and he sees no action likely in three-to-five years. He and other execs at the company say this year is shaping up to be a record on-year for political revenues at Sinclair and they have great expectations for the role super PACs will play.

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.

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.

With an approval rating that is heading for sub-zero, Congress would do well to take this advice on many subjects. But the one topic I’m focusing on — as the former chairman of the FCC — is just this: please do not tell the FCC how to auction spectrum.

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 House is expected to vote tomorrow or Wednesday on a major GOP jobs package that has a spectrum auction proposal attached. House Republicans and Senate Democrats are trying to reconcile key elements of the spectrum provisions. But there is still a possibility that the spectrum provisions could be dropped.

Republicans are considering including Rep. Greg Walden’s (R-Ore.) spectrum bill in a proposal to extend the payroll tax holiday, Speaker John Boehner’s (R-Ohio) office confirmed.

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.

The legislation instructs the FCC to make “all reasonable efforts to preserve … the coverage area and population served” of broadcasters who choose to hang on to their spectrum and not participate in the spectrum action. NAB praised the bill as a “a major step forward in ensuring that local television stations will continue to be able to serve our vast and diverse audiences.”

Sinclair’s Mark Aitken believes there’s a better option to the government’s spectrum auction proposal that would benefit both broadcasters and the U.S. Treasury. If broadcasters were granted permission to lease their excess spectrum to wireless carriers — to become the big bulk carriers of video and other bandwidth-intensive content — they could generate over $1 trillion in revenues over the next 15 years. In addition, under current law, they would be required to pay 5% of that revenue to the government, which Aiken says could be $62 billion for  Treasury’s coffers.

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.