Broadcasters Launch Coalition to Advocate For TV in Response to ‘Incentive Auctions’

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By Paul Barbagallo  

The National Association of Broadcasters has launched a coalition for the express purpose of lobbying federal lawmakers and regulators on preserving free over-the-air broadcasting, which some TV stations fear would be threatened if Congress authorizes the Federal Communications Commission to hold so-called “incentive” auctions of spectrum.

The Nov. 1 announcement of the coalition comes just three weeks before the Joint Select Committee on Deficit Reduction must submit its recommendations to Congress.

It is widely expected that the so-called super committee will propose some form of legislation authorizing incentive auctions, in which television broadcasters, who license spectrum through the FCC, could voluntarily release some of it back to the government in exchange for a share of the auction proceeds. The spectrum would be auctioned to mobile network operators, such as AT&T Inc., Verizon Wireless, and Sprint Nextel Corp., which are facing what FCC Chairman Julius Genachowski has termed a “looming spectrum crunch.”

‘There is a Problem.'

The committee is to report by Nov. 23 with its recommendations, and Congress must hold an up-or-down vote by Dec. 23.

“I recognize the reality, as a former legislator, that there is a lot of momentum behind this,” NAB President and CEO Gordon Smith said during a press briefing to announce the formation of the coalition, dubbed The Future of TV Coalition. “We understand there is a problem; we don't deny that.”

“What we're saying is that if auctions go forward, ‘Please protect the signal contours of TV broadcasters,’ ” Smith continued. “… Repacking is a tremendous concern to us.”

The NAB estimates that 900 to 1,200 TV stations would have to change channels as a result of “repacking”—or squeezing remaining stations into a smaller band—which could result in a temporary service disruption for viewers.

Under legislation in both the Senate and House, the return of channels to the FCC would be voluntary, but a repacking would not. According to the association, the cost to TV broadcasters choosing not to participate in incentive auctions—those that would be repacked—would be $2.5 billion.

Among the likely expense items full-power stations may require are new transmitters ($750,000), new antenna and transmission lines ($200,000-$750,000), new filters ($100,000-$300,000), new combiners ($100,000-$300,000), and reinforced towers or new towers to handle a larger antenna ($200,000-$1.8 million), the NAB has said.

“We ask that those [broadcasters] who choose not to participate will be held harmless,” Smith noted. “That is the line of demarcation where we have staked our argument.”

He admitted, too, that “some in the broadcast industry wish that there would be no auction.”

Members of the Future of TV Coalition include broadcasters and organizations such as Antennas Direct, Bounce TV, the Center for Asian American Media, County Executives of America, The Country Network, Digitenna, DLT Entertainment Limited, LATV Networks and American Latino Syndication, Luken Communications, MHz Networks, Native American Public Telecommunications, New York Television Festival, Open Mobile Video Coalition, Pacific Islanders in Communications, Qubo, This TV, and Vme Media.

Second Coalition Recently Formed.

The Future of TV Coalition is the second broadcaster-backed coalition to launch in the last two weeks.

The Coalition for Free TV and Broadband, which represents low-power TV and translator stations, has proposed an alternative to incentive auctions, which would involve offering point-to-multipoint broadband services at a lower cost, while contributing billions of dollars to the U.S. Treasury. Under the plan, the FCC would modify rules so broadcasters could offer “ancillary” services and remit 5 percent of the revenues from such services to the U.S. treasury, as current law requires.

An analysis conducted by Business Analytix Inc. estimates that the “broadcast overlay” plan would produce up to $62 billion for the U.S. treasury between 2014 and 2026. By contrast, the Congressional Budget Office has estimated the auction of broadcast TV spectrum would generate $24.5 billion in revenues between 2012 and 2021.