For a month, the FCC has been conducting the first phase of the TV buyback auction. Now that digital TV is everywhere and multiple streams of programming can be packed on a single signal, the FCC wants to compress the TV spectrum to free up space for new wireless services.
The details are largely confidential, but the first phase is complete. The FCC wanted to find out the maximum number of channels willing to go out of business or move to digitally share signals – the “clearing target”.
The good news is they got the maximum bandwidth they were shooting for – 126 MHz nationwide. That will leave channel 29-x as the highest over the air channel number.
May 31st, the actual bidding starts in the reverse auction – with the target set, the license holders will be lowering their prices until the clearing target is met. Hold out for too much and your license may not sell. Lower your price too much or too soon, you leave money on the table. This is really high stakes poker.
Then the challenge is to see if communications companies will ante up the cash to actually buy up all the bandwidth, with some cash left over for the US Treasury. AT&T and Verizon are prohibited from bidding in most major markets as they already control most of the bandwidth. Broadcasters – including those that didn’t participate will have up to 18 months to move to their new channels. Where there was no need to get licenses turned in, the new bandwidth should come on line much sooner.
If all the bandwidth is sold, there will be only 28 TV channels left in the US. The reality is most TV viewing now is over satellite, Cable TV and more recently directly over the Internet. Wasting millions of watts on over the air TV to a shrinking audience serves less and less of a purpose.
All of this seems wacky. Buying back licenses? Government dollars being spent? Oh well – maybe this is Obama’s push to add “diversity” to the airwaves.
It’s the cell phone companies putting up the cash, not the government. If the bids to buy the spectrum exceed the cost to acquire it, the difference will be revenue to the US Treasury.
From 30,000 feet, this process is why people in Sudan making $10 a month can afford a cell phone and we pay $50+ a month. Most of the cost of your cell phone bill is paying off the amortization costs of acquiring the spectrum.
A great read. Thank you for sharing. No mention of TV channels 2-6. The initial HDTV plan was to vacate VHF completely so channels 2-13 could be re-purposed. Channels 7-13 are in a higher continuous band and were to be used as a transition phase. Channels 2-4 in the lowest band and channels 5-6 in the middle were to be freed up almost immediately.
Well, last I looked there were not only HDTV broadcasters still in the upper band, but Channel 6 in Philadelphia was really on channel 6 where it has been since it first started broadcasting decades ago as WFIL-TV. (WFIL-AM is still around and in the SRG database. Long John Silver worked there. )
That seems to have changed. They may still be holding out to free channel 6 since it is adjacent to the FM band. Of the 126 MHz, 26 MHz hasn’t been set aside with a purpose. An all digital FM service to phase out analog FM is a possibility, but that would take 20 years to do.
TV license holders were given different options with different price tags. Because each station has a different power and (mostly) different transmitter location, actually freeing the spectrum completely is tricky.
The area along the Mexican border is the most problematic. We have a treaty with Mexico to allow them to keep broadcasting up to channel 36. Maybe Donald Trump can fix that… Negotiate a deal or something.
“Our leaders have been so stupid!” 🙂
Seriously, It would be interesting to know whether there are Mexican TV stations broadcasting along the border in English into the US market. I believe there is a TV station in the San Diego market that broadcasts from Tijuana and has call letters starting with an X. I know there are several radio stations there that do that.
There are also probably Spanish language stations on the Mexican side of the border targeting Mexicans living on the US side.
To get this deal done, we need a leader that is good at negotiating and that would not be beholden to lobbyists or campaign contributions. Can anyone think of anyone? lol
Here were the opening prices in the reverse auction
https://apps.fcc.gov/edocs_public/attachmatch/DA-15-1191A2.pdf
So, for example – CBS was asked in the phase just completed – if we give you $900 million, would you turn in the license for WCBS-TV in NYC? If they say “Yes”, then we’re just haggling over price. $900 million is the theoretical maximum. Bidding will move downward. Stations with a -CD suffix are low power TV stations
If WCBS is willing to move to low VHF (2,3,4,5,6), they might get $675 million and keep the license. They could also pair up with another station – so WABCTV-2 might become WCBS-TV. In Digital TV, channel numbers are no longer real anyhow.
A question since I’ve never owned a digital TV
In the analog days, TV had to keep adjacent channels open to avoid interference. In Pittsburgh where I grew up, TV was on on 2, 4, 7, 9, 11 and 13 (6 and 7 are not adjacent)
Other cities might be on 3,5,8,10 and 12
With Digital, does the adjacent channel rule go away? Or since it is lower power, does the separation distance between stations go down?
Wikipedia says with digital, the adjacent channel requirement goes away