NETA attendees get update on funding outlook and auction plans

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TAMPA, Fla. — This month will bring some clarity to big questions facing public TV stations, with a new Speaker of the House taking the gavel in Congress and the FCC releasing opening bids for next year’s spectrum auction.

Attendees here at the National Educational Telecommunications Association conference heard an update on those topics Monday at a briefing with the Association of Public Television Stations. Kate Riley, v.p. of government and public affairs for APTS, said it’s unclear who will take over as House Speaker after Rep. John Boehner retires at the end of the month. Legislators could vote on a new speaker this week, Riley said.

“This change in leadership really is going to make it even more difficult to know what Congress is going to do and how they’re going to operate in the coming months,” Riley said.

Following Boehner’s announcement, lawmakers passed a continuing resolution, backed mainly by Democrats, that keeps spending at 2015 levels, but with a 0.2 percent across-the-board cut in funding. The resolution expires Dec. 11.

Congress has yet to work out next year’s budget, which could include forward funding for CPB and public television projects like Ready To Learn. Before the impasse, the House and Senate both approved level funding for CPB in fiscal year 2018. But while the Senate approved funds for Ready To Learn, the House did not.

“Basically, we don’t know what’s going to happen,” Riley said. “We do feel relatively confident about CPB funding and cautiously optimistic about Ready To Learn.”

Riley said that as the December deadline approaches, one option for legislators would be to extend the current continuing resolution for a year. That would hold spending at 2015 levels but would also lock in level funding for CPB and Ready To Learn.

The uncertainty has cast doubt on potential funding for V6, the proposed PBS interconnection project that would connect stations with a closed fiber-optic network, providing an upgraded alternative to the existing satellite system. The project would rely almost entirely on federal funding to proceed but so far is unsupported.

“That’s the key — new money,” Riley said. “In this fiscal environment, it’s extremely difficult to come by.” An extension of the continuing resolution or additional resolutions would make interconnection funding impossible until a budget deal is reached with bipartisan support, she said.

Looking beyond funding battles, APTS COO Lonna Thompson told NETA attendees that the FCC will take a big step forward this month in the process for the spectrum auction. Thompson said the FCC will mail opening bid amounts to broadcasters and release the amounts publicly around mid-October.

The letters will give licensees a menu of opening bid amounts, reflecting the options of selling spectrum, entering into a channel-sharing agreement or moving from UHF to a lesser-quality VHF signal.

Some in the audience questioned whether the opening bids will be at all close to actual auction results. While major markets will see competitive bidding from the cellular carriers who will buy the spectrum, Thompson said, smaller markets will see less to no interest despite opening valuations.

“We’ve been talking to people about what to expect from the opening bids,” Thompson said. “And we’ve been told by, I think, the smartest people in the business that you should plan on getting about half of the opening bid. It’s going to drop.”

APTS CEO Patrick Butler said that expecting even half the opening bids could be optimistic. Some markets could see more than 50 rounds of bidding, which would drive prices downward.

“Don’t assume you’re going to get half of the bid,” he said. “That’s the most you can expect. It’s going to be highly dynamic.”

Thompson said that after receiving opening bids, licensees will have until around Thanksgiving to submit nonbinding letters of interest in participating in the auction. The auction is scheduled for March 29, 2016.

Questions, comments, tips? [email protected] / @BenMook

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