Seeking Spectrum, FCC Tries To Entice TV Stations To Go Dark
By KYW tech editor Ian Bush
PHILADELPHIA (CBS) - Blame our insatiable appetite for mobile broadband: wireless companies say they need more spectrum -- the frequencies that carry radio, television, and all sorts of data through the air.
Part of the government's plan to deal with this is to buy back spectrum from TV stations early next year — meaning some of your channels could go dark.
In Philadelphia, the FCC's top-dollar opening bid is for KYW-TV (CBS-3): up to $700 million for going off-air. It's $663 million for WPHL (PHL 17), and not much less — $646 million — for WCAU (NBC 10).
"I would think that companies that have spectrum of any sort — particularly the UHF spectrum — would say this is a good time to unload it," explains Gerald Faulhaber, professor emeritus of business, economics, and public policy at the Wharton School of the University of Pennsylvania. "It's not going to be valuable for broadcast television, it's going to be valuable for Verizon and AT&T and the other people who are doing wireless broadband. That's the wave of the future."
It's a reverse auction, meaning stations taking part likely wouldn't get that full opening bid; the FCC wants to hand over the lowest palatable price, and some stations may choose to bow out of the process.
One option for a station that takes an FCC offer and wants to stay in business is to negotiate for carriage on cable or satellite, so 90 percent of TV watchers wouldn't notice a difference. But the one in 10 homes that gets free television by way of antenna would be out of luck — unless the station took less money from the FCC to keep a presence on VHF.
Faulhaber says when he served as chief economist at the FCC in the early 2000s, he found that a spectrum auction would have brought in enough money to pay for lifelong cable or satellite service for over-the-air households — times a factor of 10.
Smaller broadcasters and companies that own two stations in a market might be most interested in the auction. The FCC hopes to raise up to $60 billion (though some wireless execs have scoffed at this number) from wireless companies to pay for all this — and to have some money left over.
