Airwaves Auction Success Hinges on TV Signal Moves

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By Kyle Daly

The Federal Communications Commission has launched an ambitious effort to move nearly a thousand TV station signals so companies such as T-Mobile US Inc. can use the airwaves to handle exploding data demands.

The commission April 13 announced the winners on both sides of its spectrum incentive auction. Bidders including T-Mobile and Dish Network Corp. spent $19.8 billion to license the airwaves. Broadcast license owners such as Twenty-First Century Fox Inc., Sinclair Broadcast Group Inc. and Nexstar Broadcasting Group Inc. received a total of $10 billion to give up their licenses.

The winning companies can’t get their hands on the spectrum until the FCC moves the broadcast signals. With the release of auction closing documents April 13, the FCC began a “repack” of the signals that’s expected to last 39 months. The agency plans to move television stations to other airwaves in 10 stages.

“While we celebrate reaching the official close of the auction, there is still much work ahead of us,” FCC Chairman Ajit Pai said in a statement. “It’s now imperative that we move forward with equal zeal to ensure a successful post-auction transition, including a smooth and efficient repacking process.”

Most of the stations that gave up spectrum licenses are opting to let their current signals go dark and share a channel with another station in the same market. A few stations plan to go off the air altogether. But hundreds of other stations that didn’t hand over licenses also must change frequencies to avoid interference with the wireless services on the auctioned airwaves.

In all, 987 stations will see their signals move, only 30 of which exchanged their licenses for cash in the auction. That’s substantially below analyst and broadcast industry estimates that up to 1,300 stations might have to move in the repack, FCC officials told reporters on an April 13 conference call. But it’s still higher than earlier estimates.

The National Association of Broadcasters, an industry trade group, argues that 39 months and a $1.75 billion fund drawn from the auction proceeds for signal relocation costs isn’t enough time or money to finish the job. The NAB filed an FCC petition in March asking the agency to grant more time for repacking on a case-by-case basis. It’s unclear whether the agency will act on the petition.

The first phase of repacking is scheduled to end Nov. 30, 2018. Affected broadcasters have until July 12 to apply for construction permits for the broadcast tower work they’ll need to change frequencies. They’ll have to submit cost estimates to the FCC by July 12 as well.

“Today is day one of the repack,” Jean Kiddoo, deputy chief of the FCC Wireless Bureau, said on the press call. “The next 90 days are critical.”

Wireless Industry Bids

T-Mobile was the top bidder, spending $8.0 billion, followed by DISH Network Corp., which spent $6.2 billion. AT&T Inc., the nation’s top wireless provider, bid just $910 million. Verizon Communications Inc. ultimately dropped out without buying any licenses.

Under auction rules, winning bidders will have six years to offer wireless service to at least 40 percent of the population covered in their service areas. If they don’t, their initial license term of 12 years will drop to 10 years. Any company that isn’t offering wireless services to at least 75 percent of the covered population by the end of the first license term will lose the license.

To contact the reporter on this story: Kyle Daly in Washington at kdaly@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

For More Information

The FCC's public notice announcing next steps post-auction is available at: http://src.bna.com/nU8

The list of broadcast winners is available at: http://src.bna.com/nU9

The list of wireless winners is available at: http://src.bna.com/nVa

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