Doug Lung /
Analyst: Broadcast Bankruptcies Could Be Answer to Broadband Spectrum Shortage
You've heard the story before: No one watches TV over-the-air anymore, so why not use the spectrum for something more interesting—perhaps wireless Internet. While this story ignores the significant percentage of people that do watch over-the-air, the question remains: Could the spectrum be better used for something else?
Tom Wheeler, Managing Director, Core Capital Partners, in the article Broadcast Bankruptcies: The Solution to the Spectrum Crunch
, notes that Wall Street values Sinclair Broadcasting's 30 stations at less than $300 million and the 100 stations in bankruptcy have no market cap. As a result of the bankruptcies, banks and hedge funds will find themselves owning TV stations. Wheeler suggests these “accidental broadcasters” will look at the $100 billion the wireless industry paid in the last FCC auction and ask “What if...”
Some of the “What if...” scenarios Wheeler offers are combining multiple broadcasters onto one channel (no HDTV) to keep some service to those people still watching over-the-air and sell the rest of the spectrum to a wireless carrier. A simpler approach is leasing bandwidth on the station's digital signal to other services using the ATSC M/H standard. One example would be a “mobile Hulu”.
The “accidental broadcasters” could combine assets to create a nationwide spectrum footprint.
Read Tom Wheeler's article to see how he answers his question: “With television revenues in a freefall and the new digital capacity yet to produce meaningful income, just how long will the hedge funds and international bankers be willing to sit idle and watch as their new asset ponders its future?”