Broadcasters Want ‘Successful, Voluntary’ Auction, Ex-MSTV Chief Says
Over-the-air broadcasters “want a successful, voluntary” incentive auction at the FCC, “provided that it is indeed voluntary,” David Donovan, president of the New York State Broadcasters Association, told an FCBA New York chapter meeting Wednesday. Most of Donovan’s members “intend to stay in broadcasting after the incentive auction,” but think “they should be able to be held harmless” as a result of not participating in the auction, and that means not seeing their coverage areas reduced, among other things, Donovan said: “This is the guidepost that broadcasters are looking at. That’s the North Star for us."
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All viewers who receive their TV signals exclusively over the air with an antenna “should be able to do so after this is all over,” Donovan said. Across New York state, about 1.25 million people fall into that category, including some 640,000 people in New York City, he said. “Most of those populations are some of the most vulnerable populations in New York City.” Moreover, in smaller cities like Rochester, N.Y., as much as 11 percent of the viewing public receives TV exclusively through an antenna, he said.
Broadcasters “learned in the DTV transition that when you start reducing coverage areas and moving people around, consumers get mad,” said Donovan, who was Association for Maximum Service TV president during the 2009 analog TV hard cutoff. “They call us, they call the FCC, it just becomes a mess. You have to be exceedingly careful here.” Donovan fears that “for a number of reasons,” the incentive auction and the post-auction repacking proceeding “is going to be far more complex now than it was in 2009 when we did the digital transition,” he said.
Broadcasters need “a workable band plan” in the FCC’s incentive auction and repacking rules, Donovan said. Once spectrum is sold and “re-allocated” to the wireless companies, that band plan must be “efficient” and crafted so it doesn’t “result in additional interference to consumers who are trying to watch television,” he said.
Congress has said the incentive auction “must be voluntary, and we assume it will continue to be voluntary, but what does ‘voluntary’ mean?” Donovan asked. To broadcasters, it means the option of participating in the incentive auction or not, he said. But “there are a number of ways you can manipulate federal regulations to create, quote, ‘incentives to participate in the auction,'” he said. “We have to be very careful that we don’t tread down that path. So we truly want it to be voluntary."
Broadcasters “will get compensated in this auction” if they turn in their 6-MHz swaths of spectrum or “if they cut deals and share channels with other stations in the market, thereby freeing up some channels,” Donovan said. Broadcasters also deserve to be compensated if they move to VHF from UHF, “which is the prime spectrum that the wireless industry would like,” he said. Compensation would be well-deserved for broadcasters that relinquish their UHF channels because UHF is “the superior band” for DTV transmissions, he said.
As for monetary incentives, “you want broadcasters to participate in the auction,” Donovan said. “So the question is, ‘if I turn in my 6 MHz, what is it worth in the auction? What would I get paid?’ But the answer sitting here today is, ‘we don’t know.'” One “valuation” formula would be to pay a station “consistent with what its broadcast business is worth,” he said. Another is to pay based on the value of one’s spectrum “to the potential ultimate user,” he said. “Those are two very different valuations, and the question right now in Washington is how the FCC is going to adopt rules, or will they adopt rules, regarding valuations. And that’s an extremely important issue.” Broadcasters take no official position on duopoly-preventive rules the FCC may well adopt limiting who can participate in the auction, Donovan said. But it’s a “collateral issue” that bears close watching because it “clearly will affect the price and may very well affect the participation rates,” he said.
The “real concern” of broadcasters that want to remain broadcasters post-auction is that “potentially all” TV channels everywhere run the risk of disruption in the repacking process, Donovan warned. “To pull out your engineering shoehorn and make this work, you may have to reshuffle the entire deck, which means every channel may need to be reassigned a new channel number. It’s just like we went through in the DTV transition, only this time, you won’t have this analog station that stays on the air while you do it. You're going to actually have to shut down and move channels around.” The problem could be extraordinarily “complex” in New York City, where all stations have antennas mounted on the Empire State Building, but may try to move them to the new One World Trade Center tower, “which brings out a whole host of issues,” he said.