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FCC’s Auction Target: The Impossible Dream

A version of this post originally appeared on Multichannel, a news site for cable television news and broadcasting.

In the 600-Megahertz reverse auction for broadcast TV station spectrum, the Federal Communications Commission has set an unattainable bar: An $86 billion ask for 126 MHz of frequency to then be made available for wireless use, at a value that most analysts say is only worth between $30 billion and $40 billion.

The FCC ask and the market realities are far apart.

Should this auction be considered the greatest boondoggle in a rich history of TV broadcasting? Is this deal designed to fail, or to make a statement to educate broadcasters about their spectrum value? Or must this be the price of admission for cable to join the wireless party?

I say none of these.

This auction is the result of the change from analog to digital, with spectrum made redundant by more efficient digital transmission. The change required significant capital investment by the broadcasters. Throughout the world, broadcasters were granted free or low-cost broadcast licenses to encourage the capital investment required for over-the-air (OTA) transmission. And millennials are rediscovering the value of “free, ad-supported” OTA broadcast: Witness the “cord-cutters special” on Amazon Prime Day!

Why should national wireless incumbents even bid in this auction?

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Ryvicker: Spectrum Auction Likely To See Multiple Stages

A version of this post originally appeared on B&C, a news source of New Bay, providing multichannel marketing solutions and information to communities. 

In response to the just-announced $86,422,558,704 clearing cost for broadcasters to exit spectrum—at least in the first round of the FCC's auction and at the highest spectrum clearing target of 126 MHz—Wells Fargo senior analyst Marci Ryvicker said, "This is way, way, way above what we had been expecting ($35B) and also way, way, way above what consultants had been saying ($50-60B)."

"Our quick take is that the broadcasters showed discipline - investors were fearful that this would be a race to the bottom and it clearly was not; rather this was an orderly auction that came out with prices much higher than expected. That said, this creates a challenge for the forward auction as we have struggled to see more than $30B being spent by the wireless companies. This clearly means, to us, that the entire incentive auction will run through multiple stages and could go into 2017 unless the FCC will pursue a quick forward process; i.e. allowing multiple (and when I say multiple, I mean multiple) rounds per day."

But, as she also points out, it will not be until the forward part of the auction—where wireless carriers and others bid on the reclaimed spectrum—that the marketplace decides how much broadcasters will ultimately get.

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EAS Test Reporting System Deadline Fast Approaching

A version of this post originally appeared on Lexology, a daily newsletter that delivers tailored updates and analysis to the desktops of business professionals worldwide. 

All Emergency Alert System (“EAS”) Participants must complete EAS Test Reporting System (“ETRS”) Form One on or before August 26, 2016. This would include all cable television systems, TV stations, radio stations and low power TV stations. Failure to comply with the Commission’s ETRS requirements may open EAS Participants to FCC enforcement actions. Therefore, it is essential that all EAS Participants understand their obligations with the rollout of the FCC’s new ETRS system.

Background

With a multitude of major emergency events occurring over the past several years, the EAS has never been more crucial than it is today. As the nation moves from the use of legacy networks to next-generation technologies, the FCC has been intent on ensuring the improved operation and exercise of the EAS.

To test the aptitude of the nation’s EAS equipment, the Federal Emergency Management Agency (“FEMA”), in conjunction with the FCC, conducted the first nationwide EAS test on November 9, 2011.

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The Sneaky Way Broadcasters Are Using TV on the Radio

A version of this post originally appeared on Tedium, a twice-weekly newsletter that hunts for the end of the long tail. 

TV on the Radio isn't just the name of a really good band.

It's also a quirk in the design of analog television, a medium that has largely been usurped by its digital equivalent.

But a funny thing happened on the way to obscurity: As analog TV gave way to digital, a handful of risk-taking broadcasters, sensing an opportunity, have started to run those analog TV stations as FM radio stations—big FCC plans be damned. The shift is surprisingly contentious in the world of broadcast.

And it all comes down to the special superpowers of the VHF-driven channel 6.

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LPTV Entrepreneur Weighs In

CADILLAC, MICH.Donald Trump made a campaign visit to Cadillac in March—the first visit by a presidential candidate since George Wallace campaigned in 1972.

Like all of the candidate’s events, Trump’s visit drew enormous crowds, far bigger than any venue in the town of 10,000 could hold. All the local media plus several national outlets, including CNN and Fox News, were in attendance. However, of all the broadcast media at the event, only one TV station, WMNN-LD, broadcast the rally live and in its entirety.

I built WMNN five years ago, after being interested in TV for as long as I can remember. I got my start in the industry by running a camera for football games at the local public access station at the age of 13. By the time I was 16, I had an internship in the news department at the local Fox affiliate—a small enough station that the running joke was, “go send the intern to cover the fire.” I would regularly be put on assignment due to the station’s small staff.

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