UPDATE 2/27/12: President Barack Obama has signed the HR 3630 Middle Class Tax Relief and Job Creation Act of 2012, which includes spectrum auction. Under the bill, the broadcasters have secured safeguards they sought, including a provision directing the FCC to make "all reasonable efforts" to maintain geographic areas and audiences for stations that do not wish to give up their spectrum, as well as $1.75 billion set aside from the sale of the proceeds to offset the cost of repacking.
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.
The auction is not expected to be held for as many as 10 years because of the procedures involved, including up to three separate rule-making sessions. According to the Congressional Budget Office, the auction is estimated to bring in $15 billion for the federal government. Participation in the auction is voluntary, and the FCC is also prohibited from involuntarily reassigning a broadcast TV licensee from a UHF channel to a VHF channel.
It is yet unclear just how many broadcasters will choose to sell.
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On December 1, the House Energy and Commerce Subcommittee on Communications and Technology voted 17-6 in favor of the Jumpstarting Opportunity with Broadband Spectrum (JOBS) Act, introduced by Congressman Greg Walden (R-OR). The bill would direct the FCC to auction off spectrum, splitting some of the revenue with the TV stations that choose to participate in the auction. Walden's legislation directs the FCC to make "all reasonable efforts to preserve the coverage area and population served" of broadcasters who choose not to participate in the spectrum auction. The bill provides up to $3 billion to compensate broadcasters who do not take part in the auction, but would have to change channels in the "repacking" of the TV band. The House measure also states that the FCC cannot move stations from a UHF channel to a VHF channel or from a high VHF channel to a low VHF channel. Congressman Walden’s bill stipulates that both full-power TV stations and Class A low-power stations can participate in incentive auctions. Additionally, the bill mandates the FCC to use a “reverse auction system” as a means to set up a price at which TV stations would give up their license. A ‘reverse auction system’ is the defined in the bill as the “portion of an incentive auction of broadcast TV spectrum under section 104(a), in which a broadcast television licensee may submit bids stating the amount it would accept for voluntarily relinquishing some or all of its broadcast television spectrum usage rights.”
One important observation: Walden’s bill states that if the auction proceeds are insufficient to cover the incentive payment and repacking costs, the auction fails. Stations that participate in a channel-sharing arrangement retain must-carry rights.
During the subcommittee hearing, Congressman John Dingell (D-MI) offered the Bilbray-Dingell amendment that would prohibit the FCC from repacking the broadband frequencies without first addressing the international broadcast restrictions and treaties with Canada and Mexico, ensuring that U.S. TV stations along the South and North borders will not be repacked out of business.
The amendment passed unanimously and now becomes part of the legislation. Congressman Dingell has been concerned about the impact on free over-the-air television and has strongly supported local broadcasters since spectrum auctions were first discussed.
Please click
here for the analysis of the bill as it affects the broadcasters.
Link to the full version of Congressman Walden’s bill can be found
here.
The Issue: Spectrum Auction Legislation grants the FCC a wide authority to reallocate a large band of TV spectrum to wireless broadband through an ‘incentive’ auction. To date, the bill has received a favorable recommendation by the Committee on Commerce, Science and Transportation.
The U.S. treaty with Canada creates a 250-mile ‘spectrum buffer zone’ from the Northern border; therefore, 210 stations in top 61 markets within the ‘buffer zone’ will be affected by the spectrum auction.
In Michigan, 31 full power stations will be affected by the spectrum auction and may lose their ability to transmit over-the-air. The spectrum auction will create a chain reaction from Detroit to Flint, Lansing, Kalamazoo and Grand Rapids. The U.S. Census Bureau estimates that 1.6 million people in Michigan rely exclusively on over-the-air broadcasting. The Super Committee on Deficit Reduction expressed its intention to include the spectrum auction legislation in its recommendations for deficit reduction. Congressional Budget estimates that auction can bring in anywhere between $15-$20 billion depending on the number of MHz to be auctioned off. The FCC maintains that it has a methodology for spectrum reallocation, but has not released any concrete plans regarding the amount of MHz to be auctioned off and ensuring that all the stations have a ‘home’ spectrum frequency.
Legislative Action: To protect Michigan broadcasters’ ability to transmit OTA, the MAB has been in regular contact with the Michigan Congressional Delegation via conference calls, personal appointments, and letter campaigns. Specific efforts were made to educate Congressmen Upton and Camp on the negative impact of spectrum auction on Michigan because the Congressmen serve as the Michigan delegates to the Super Committee on Deficit Reduction. Per the request of the MI Congressional Delegation, the MAB in cooperation with the NAB, drafted an amendment language to Senate Bill S911 that would ensure protections to the local broadcasters. Specifically:
→ The FCC must commit to replicating the contours of the stations’ signals
→ The FCC cannot move the stations from UHF to VHF signals
→ Viewers that rely on the local OTA TV stations must continue to have access to those stations after the reallocation
→ The FCC can only conduct one voluntary incentive auction
→ Broadcasting stations not wishing to participate in the auction will be held harmless
The MAB will continue its active advocacy on behalf of the Michigan broadcasters and will keep you updated on all the latest spectrum developments.