In Fight Over Spectrum Provisions, Broadcast Industry Picks Up Key Wins

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By Paul Barbagallo  

With the passage of a 10-month payroll tax cut extension, the broadcasting industry emerged relatively unscathed from one of its biggest political and policy battles in years.

For nearly two years, the National Association of Broadcasters lobbied aggressively against legislation authorizing voluntary incentive auctions, by which the Federal Communications Commission would reclaim NAB members' airwaves and auction them off to the highest bidder, sharing some of the proceeds with the TV stations that volunteer to return their spectrum to the government.

In the end, Congress included a version of that legislation in its compromise deal to extend the payroll tax holiday. Lobbyists for every conceivable interest that could be affected swarmed over the Capitol, but it was the broadcast industry, noted one lobbyist, that “got nearly everything it wanted.”

Industry observers and analysts credit Rep. Greg Walden (R-Ore.), chairman of the House Energy and Commerce Communications Subcommittee and a former broadcaster, for including several broadcaster-friendly provisions in the bill.

No Mandatary Relinquishment.

Arguably the most significant concession was one the NAB had argued for from the beginning—making the giveback of spectrum purely voluntary. Although the Temporary Payroll Tax Cut Continuation Act of 2012 (H.R. 3630) stipulates that about $15 billion of the $30 billion extension in unemployment benefits will be paid for with the proceeds of the incentive auctions, nothing in the measure will force TV broadcasters to relinquish their airwaves. As the bill is drafted, broadcasters can either turn in their spectrum for cash compensation or voluntarily relocate to another frequency.

The FCC intends to shuffle some stations around in the band to create contiguous blocks of spectrum, which are more desirable to wireless carriers, the likely bidders in an incentive auction. To compensate broadcasters for such costs, Congressional leaders have set aside roughly $1.75 billion.

What is more, in lieu of accepting money from the FCC for relocating, broadcasters could seek a waiver of the agency's service rules to “provide services other than broadcast TV services,” so long as they provide at least one TV program stream.

According to the National Association of Broadcasters, between 900 and 1,200 TV stations likely will have to change channels as a result of “repacking”—squeezing remaining stations into a smaller band.

Among the possible expenses 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.

Preserving Coverage.

Meanwhile, provisions in H.R. 3630 will require the FCC to make “all reasonable efforts” to preserve the coverage area and population served by each broadcast TV licensee.

The bill also prevents the FCC from involuntarily reassigning a broadcast TV licensee from a UHF channel to a VHF channel or from a channel between the frequencies from 174 MHz to 216 MHz to a channel between the frequencies from 54 MHz to 88 MHz.

Last, there is a broadcaster-pushed amendment in the bill offered by Reps. John Dingell (D-Mich.) and Brian Bilbray (R-Calif.), that will guarantee continued viewer access to TV station signals along the Canadian and Mexican borders. Ultimately, the United States will have to engage in a treaty process with Canada and Mexico to reclaim airwaves affecting these areas.

“Our concern all along was that this would morph from voluntary to involuntary,” Dennis Wharton, a spokesman for NAB, told Bloomberg BNA in a phone interview about the legislation. “If not enough stations volunteer, then are the [wireless carriers] going to say ‘Well, we tried voluntary. Let's try involuntary and force them off these airwaves'? That's why the protections built into the legislation are so important to broadcasters because that mitigates the opportunity for a forced reclamation process.”

The broadcasters' spectrum has been held by the wireless industry as “beachfront property,” suitable to solve what FCC Chairman Julius Genachowski has termed a “looming spectrum crunch”from increasing consumer demand for bandwidth-hungry smartphones and tablet computers.

The FCC is seeking to reclaim as much 120 MHz of spectrum from broadcasters, to increase the amount available for mobile broadband applications by about 22 percent.

According to industry estimates, between 300 and 400 TV stations would need to be cleared to repurpose 120 MHz.

To date, not one major TV broadcaster has publicly said it would give back spectrum.