FCC can auction spectrum, but will broadcasters sell?
On Friday, Congress cleared the way for the Federal Communications Commission to auction off some of the airwaves that broadcasters use to transmit their programming to wireless companies.
The proceeds would go toward building a new national network for law enforcement and public safety workers and toward paying for an extension of payroll tax and unemployment benefits.
Now comes the hard part: actually getting the spectrum, which has been valued at $25 billion, back from broadcasters to sell.
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.
“We have no intention of giving up spectrum,” said Alan Frank, president and chief executive of Post-Newsweek Stations, a broadcasting group that owns stations in several big cities, including Detroit, Houston and Miami.
David Smith, CEO of Sinclair Broadcast Group Inc., which operates 74 stations around the country, said he “hasn't heard of any broadcaster who has said they have anything for sale.”
The big networks seem to share that view. Although none would comment publicly, executives at Fox and NBC indicated they had no desire to sell any of their airwaves. CBS Chief Executive Leslie Moonves has previously said his company wants to keep all its spectrum.
“It would hurt our business,” Moonves said when asked last year at the National Assn. of Broadcasters convention if he would consider parting with some of CBS' airwaves.
Some broadcasters of independent and small-market stations could be game. Bert Ellis, president of Titan Broadcasting, which owns KDOC-TV Channel 56 in Los Angeles, told the House Subcommittee on Communications and Technology last June that his company might be willing to sell some of its spectrum.
In Los Angeles, there are several small independent stations that cater to ethnic groups including Asians and Latinos. The National Assn. of Broadcasters worries that if they sell, local communities would suffer.
“The stations likely to sell — if any — are the ones that offer truly niche programming serving a melting pot of immigrant populations,” said Dennis Wharton, a spokesman for the broadcasters group. “The notion that an ABC or CBS affiliate would voluntarily choose to go out of business to help solve an alleged spectrum crunch is ludicrous.”
Not everyone paints such a grim picture. The Wireless Assn. and the Consumer Electronics Assn. said this week that “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.”
Philip Weiser, dean of the University of Colorado Law School and a former telecommunications advisor for the Obama administration, said he expects smaller broadcasters to try to have their cake and eat it too by sharing spectrum.
For example, one TV station could sell its spectrum and then partner with another station and share airwaves. Although that would not appeal to a big broadcaster, smaller mom-and-pop TV stations might be more willing to embrace such an option.
“It is a huge opportunity for them,” said Weiser, adding that such a practice would allow for a more efficient use of spectrum and would give broadcasters who choose to sell a “hefty profit.”
-- Joe Flint
Image: CBS Chief Executive Leslie Moonves at the Producers Guild Awards. Credit: Associated Press