CTIA, CEA: Spectrum Auction To Yield $33B

The FCC’s proposed auction of 120 MHz of “underutilized” broadcast TV spectrum will net more than $33 billion for the U.S. Treasury, the CTIA-The Wireless Association and Consumer Electronics Association say in a white paper submitted to the FCC.

In addition to helping to balance the federal budget, the paper says, the auction will also shift the valuable spectrum to wireless broadband operators as called for in the FCC’s National Broadband Plan.

Key findings from the white paper:

• Revenue may be much higher if valuations are consistent with recent auctions for similar spectrum rights.
• Only a very small percentage of the nation’s broadcast stations need participate in the auction in order to address the nation’s broadband spectrum shortage. Indeed in the vast majority of broadcast markets, an incentive auction will still be successful even if no broadcast stations participate.
• The estimated enterprise value of those broadcast TV licensees that might voluntarily surrender their channels ranges from $1.2 billion to $2.3 billion. This conservatively assumes those stations that participate in the voluntary incentive auction surrender their licenses rather than accept lower-cost options such as channel sharing or cellularization.
• Remaining broadcast facilities operating on TV channels 31-51 would need to be relocated or “repacked” to the new core channels at TV channels 7-30. Based on National Telecommunications and Information Administration data, CTIA and CEA estimate repacking would cost approximately $565 million.
• Gross revenue from the incentive auction will be $36.3 billion, but, after payments to broadcasters of as much as $2.3 billion to compensate them for the loss of spectrum and $565 million for repacking, the net proceeds would be around $33.4 billion.

“With support from the U.N. and thanks to the efforts of President Obama, the FCC, the NTIA and numerous policymakers, it’s clear there’s a recognition that our industry needs more spectrum so we can remain the world’s wireless leader,” says Steve Steve Largent, president and CEO, CTIA.

“Our members are willing to spend billions to purchase unused or underutilized broadcast spectrum to fuel the ‘virtuous cycle’ of innovation and competition. That’s why this proposal is an all around win for the federal government, the wireless industry, broadcasters and most importantly, consumers who demand the best products and services.”

National Association of Broadcasters EVP of Communications Dennis Wharton commented on the white paper: “It’s hard to take seriously an analysis of broadcast spectrum values done by parties with a vested interest in forcing scores of broadcasters out of business. It’s noteworthy that CTIA and CEA cavalierly suggest eliminating ‘smaller stations in larger markets,’ which translates into fewer niche broadcast stations that serve important immigrant communities and religious audiences.

“NAB does not oppose spectrum auctions that are truly voluntary, and we look forward to an informed dialogue in coming months on the enduring value of free and local television for all Americans.”