April 12, 2013 in Business

TV stations anxious about airwave auctions

Ryan Nakashima Associated Press
 

LAS VEGAS – As the federal government tries to encourage companies like AT&T and Verizon to create bigger, faster mobile networks, TV broadcasters are feeling like the farmers of yesteryear who were asked to sell their land to make way for the nation’s highways.

Broadcasters own a valuable swath of invisible real estate on the airwaves and just like farmers, their livelihoods depend on cultivating that fertile space. But the FCC believes clearing new lanes of over-the-air bandwidth will ease mobile network congestion, which leads to dropped calls, stuttering video and hanging emails.

Broadcasters say they are already feeling the pinch after giving up precious airwaves in the transition to digital TV in 2009. They are worried that their businesses may be in jeopardy as the government embarks on an unprecedented auction. They fret they’ll be short-changed in a complex process that is expected to rake billions of dollars into federal coffers.

“We’ve already been squeezed once,” said Gordon Smith, president of the National Association of Broadcasters, on the sidelines of the industry’s annual gathering, NAB Show, which wrapped up Thursday. “We’re being squeezed twice now. There’s no more juice in that squeeze.”

Dozens of stations nationwide are expected to sell voluntarily – and go out of business – to make way for these new mobile data highways. The process relies on a complicated “reverse auction” that involves multiple steps, each fraught with the potential for confusion.

The government wants to clear 500 megaHertz of spectrum by 2020, with 120 mHz coming from TV stations. That’s the equivalent of 20 TV stations in each market across the country. Not every market has that many TV stations, so the FCC will likely clear the path it needs merely by shuffling broadcasters around.

In February, the FCC outlined how its plan would work. Starting in late 2014, TV stations will submit bids detailing how much they would accept for either going off the air, moving to a lower channel number, or sharing a channel with another station.

Mobile phone carriers will then submit bids for how much they would pay to use potential new airwaves. The FCC hopes to match buyers to sellers, and “repack” the airwaves as much as possible to give wireless companies the use of singular bands across the country.

The repacking could result in some TV stations being forced to relocate their broadcast towers and change channel numbers on the dial.

The entire process could result in a big windfall for the U.S. government.

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