System/Policy

FCC delays spectrum auctions by several months, until early 2016

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The FCC has postponed its auction of television broadcast spectrum to early 2016, according to a blog post on the commission website Friday. Gary Epstein, chair of the Incentive Auction Task Force, wrote that “court challenges to the auction rules by some broadcasters have introduced uncertainty” into the run-up to the auction, which is mandated by Congress to clear broadcast bandwidth for the growing number of mobile devices. Under the FCC’s earlier timetable, the auctions had been slated for mid-2015. Though Epstein didn’t identify the court cases, two organizations’ complaints have been consolidated and are pending before the before the D.C. Circuit of the U.S. Court of Appeals. The National Association of Broadcasters filed a petition in August, challenging the FCC’s methodology for predicting coverage areas of TV stations among other elements.

System/Policy

FCC report aims to play up payout from spectrum auction

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An FCC-sponsored report projecting huge potential paydays for television broadcasters in next year’s spectrum auctions could prompt public TV licensees to reconsider decisions about participating in the complex proceeding. A full-power station in Los Angeles could fetch up to $570 million by giving up its assigned channel, while a similar property in New York might generate up to $490 million, according to a report by the investment banking firm Greenhill & Co. Issued Oct. 1 to spur interest in the voluntary proceeding, the report broadens the pool of prospective participants by projecting jaw-dropping values for TV channels outside of the top 30 markets. Full-power stations in Palm Springs, Calif., could bring to $180 million in the auction, for example, while a station in Providence, R.I., may be worth as much as $160 million, the report said.

System/Policy

Public TV organizations ask FCC to protect noncoms when repacking spectrum

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Three national public broadcasting organizations are asking the FCC to change its spectrum auction rules to ensure that channel repacking leaves no community without noncommercial television. The Association for Public Television Stations, PBS and CPB are concerned that repacking, or the channel shifting that will occur after the auction, could create such “white spaces.” Public television’s mission includes universal coverage, providing every American household with access to free educational television content. In a Sept. 15 petition, the organizations asked the FCC to “reconsider and revise” its auction rules based on the precedence that the agency has long recognized noncom TV spectrum as protected and distinct from commercial. The spectrum auction rules make no distinction between commercial and public spectrum.

System/Policy

Private equity gobbling up public TV stations: what does the public get?

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Public stations in Connecticut and San Mateo may be at the leading edge of a mass sell-off of public media assets in next year’s FCC spectrum auction. These stations have entered into agreements with LocusPoint Networks, a subsidiary of the private equity firm Blackstone Group, whereby LocusPoint shoulders the stations’ operating costs until the auction and then takes a significant share of the auction revenue after the station has sold its spectrum to wireless bidders. These deals have to be disclosed to the FCC, but their details do not. When the spectrum is auctioned, stations  may receive tens of millions of dollars for their spectrum, especially in congested coastal areas. This money is unrestricted and can go back into community-based digital media, or into university gyms, or into a city’s general treasury.

System/Policy

CPB eyes TV CSG rules in anticipation of spectrum auctions

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CPB will review its television Community Service Grant policies to clarify how to handle station revenues from the upcoming spectrum auction. The auctions, mandated by Congress to be conducted by the FCC before 2022, will clear spectrum for wireless devices. All broadcasters must decide whether to participate, and a station’s sale of spectrum could bring in millions of dollars. So far, two recent noncom TV deals in California and Maryland, in which a speculator paid stations up front for a share of future spectrum proceeds, each topped $1 million. The value of a similar deal in Connecticut was not made public.

Connecticut Public Broadcasting Network

Conn. network strikes deal with LocusPoint on proceeds from spectrum auction

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The Connecticut Public Broadcasting Network plans to relinquish the spectrum assigned to WEDW-TV in Bridgeport, one of four stations in its statewide network, in the FCC’s upcoming auction, according to documents filed with the FCC. Under its agreement with spectrum speculator LocusPoint Networks, the pubcaster received an undisclosed cash payout from LocusPoint and will share a portion of its future auction proceeds with the company. Financial details of the contract, approved by the network’s board of trustees in June 2013, have been redacted from FCC records due to a mutual confidentiality agreement. Connecticut Public Broadcasting Inc. is among the sole-service public TV licensees identified in a July CPB white paper warning of the creation of a “white area” — the loss of PTV broadcast service — if pubcasters choose to auction off their spectrum. But that won’t happen in this case, according to officials from LocusPoint and CPBN.

System/Policy

In spectrum auction, FCC should protect public TV’s coverage

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The FCC recently released the entire text of its Report and Order detailing rules for the upcoming broadcast spectrum auctions, making it clear that it intends to make no effort to preserve public TV signal coverage. The 484-page report, “Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions,” rejects the proposal supported by CPB and other leading broadcast organizations to preserve at least one station per geographic market. If you dive into this ponderous document, I recommend paragraph 367 and footnote 1090 (unfortunately, not a typo — there really are over 1,000 footnotes). In paragraph 367, the FCC states that it declines to “restrict acceptance of such bids based on the potential loss of television service or specific programming.”

The FCC further states that any such restrictions “could reduce the amount of spectrum available” to carry out the auction and undermine the “goal of allowing market forces to determine the highest and best use of spectrum.” The long and short of it is that if the entities that hold America’s 289 UHF public TV licenses decide to sell their underlying spectrum in the forthcoming “incentive” auction, that spectrum will be lost to noncommercial television forever. It need not be so.