Spectrum auction offers chance for increased investment in Washington’s WHUT

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WHUT’s studios on the campus of Howard University in Washington, D.C. (Photo: AgnosticPreachersKid/Creative Commons)

WHUT’s studios on the campus of Howard University in Washington, D.C. (Photo: AgnosticPreachersKid/Creative Commons)

Howard University in Washington, D.C., is considering whether to auction off its license to the valuable spectrum used by its public TV station, WHUT, for potentially hundreds of millions of dollars. That tough decision is the best thing that could happen to the school.

Not because of the money, but because making that decision would force Howard to finally take its underutilized assets seriously and consider its role in the future of media as the world’s most recognized HBCU. More on that later; for now, let’s debunk some of the already spreading myths about the reasons for this potential sale and Howard’s involvement.

WHUT, the only public station owned by an HBCU, is not for sale. It is not in financial trouble, nor has it lost market share because of a gentrifying Washington, D.C. In fact, its ratings grew slightly within the past year, according to the station’s board; it leads the market’s two other public stations in the market; and its donors, according to development staff, represent a broad cultural cross-section of the Washington audience. It could always use more money from “viewers like you,” but that’s not why a sale is being considered.

At issue is not the station itself but the very valuable spectrum the station occupies. Telecoms like AT&T and Verizon desperately want more bandwidth so that they can satisfy the growing demand for content on mobile devices. So in the FCC’s thinking, the next logical space available is that used by existing television stations. The FCC now wants to buy that space back, then resell it. That’s the simplest way to explain it.

In short, it means that all those UHF stations that you used to think were cheap because they had fuzzy signals and showed reruns have ironically become the beachfront property of spectrum. WHUT is valued in part because its higher position in the UHF spectrum makes it less vulnerable to signal interference and offers more flexibility for mobile, high-definition and other applications that future technology may bring.

But Howard is not unique. Every station in a major market has been assigned an opening bid in the event that an owner decides to enter the auction. Likewise, license-holders are all — at this very moment — strongly considering which is more: the money they make or the money they can take if they sell.

And while WHUT’s opening bid would range from under $200 million to nearly $500 million, that’s the middle of the market. WCBS in New York has an opening bid of $900 million. Everyone has a tough decision to make — though observers say it’s unlikely owners will actually earn anything near the opening bids if they do sell.

The kicker is that even if these stations decline to participate, nearly all of them will still be “repacked” under the FCC’s version of eminent domain — squeezed into less spectrum. Technically, most of those stations don’t really need all the spectrum they occupy. The conversion from analog to digital now allows them to broadcast several channels within a fraction of their previous spaces.

Emotions aside, there are compelling reasons for Howard to at least consider entering the spectrum into the auction. Chief among them is that if the spectrum does sell for an amount near the top bid estimate (again, unlikely), a sale could raise Howard’s current endowment of $600 million to nearly a billion dollars. Invested smartly, it would subsidize a lot of tuitions over many years. Also, in today’s landscape, one does not need to own a broadcast property to be a player in the media.

But there are even more compelling reasons to keep it. Here are just a few.

Howard University, with its unique educational offerings and wealth of talent, could be, if it desires, the largest supplier of black-focused content on the planet. But supplying content matters only when you also own the channels of distribution. That spectrum represents distribution, the most significant gap in black media ownership globally. Once you lose it, it will never come back.

More than just a learning opportunity for Howard students, WHUT and its studio resources are uniquely poised to be an incubator space for content makers from around the nation. What WGBH and WNET are to PBS, as the major suppliers of PBS programming, WHUT could be as well, with thoughtful investment.

While D.C. may not be Chocolate City anymore, the broader Washington area still is, and for a vast percentage of minority families, PBS is the sole source of early-childhood education. Howard has the opportunity to expand on that model, turning all its classes into a virtual university.

More important, entering the auction does not guarantee the values estimated by the FCC. Companies like T-Mobile, as one example, already hold and do not use massive amounts of spectrum. If shareholders push them to sell, that spectrum could flood the market and reduce those values dramatically. Also, reports of telecoms being flush with cash to purchase spectrum are thought to be wildly overestimated.

Yet Howard University’s options are many. There are many alternative and profitable paths between yes and no. Other stations in the market could sell their own spectrum and then lease Howard’s bandwidth. More likely, Howard may be encouraged by its Board to enter into a spectrum-sharing deal with one of its public television rivals. Not the best option for many reasons, but an option nonetheless.

The wild card in this scenario is not Howard or its board, but Congress. My gut says that Howard will stay out of the auction, but if it does, it will need to explain why it turned down money to a majority-Republican Congress that is responsible for the more than $250 million Howard gets in federal funding. That will be a tough conversation, but there are good and visionary answers to that question.

Coming up with that answer gives Howard the opportunity to take a strategic and visionary look at what it means to be a modern university in the 21st century.

Eric Easter is chairman of the National Black Programming Consortium, which funds, develops and produces black-focused documentary and digital content for PBS. He is also a member of the advisory board of WHUT. An earlier version of this commentary appeared on The Root.

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