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Originally featured on BroadcastEngineering.com
Jun 20

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6/20/2013 11:03 AM  RssIcon

Sinclair Broadcast Group’s announcement June 18 that is buying  the assets of antenna, transmission line and RF systems manufacturer Dielectric from SPX Corp. may hold a clue or two about the prospects of success for the FCC’s incentive auction and subsequent repacking of TV spectrum.

In announcing the acquisition, David Smith, president and CEO of Sinclair, is quoted as saying that if and when spectrum is repacked, Dielectric will be there to support the process.

But beyond the non-committal nature of that statement when it comes to the repack actually happening, the announcement may offer a bit of insight on the potential success of a repack both by what it did and didn’t say.

First, there’s the purchase price, described in the Sinclair press release announcing the acquisition as being “immaterial and leverage neutral.” Compare “immaterial and leverage neutral” with the $1.75 billion Congress has set aside to cover the costs of repacking TV broadcasters into less spectrum. Granted, the entire $1.75 billion won’t just be spent on antennas — there will be transmitters, waveguide, tower crews, etc. — but still, Dielectric has supplied about two-thirds of the TV industry’s high-power antennas. The slice of the repack reimbursement pie it stood to capture promised to be large.

Consider also that the FCC’s National Broadband Plan calls for freeing up 300MHz of spectrum for wireless use within five years, of which 120MHz is supposed to come from TV spectrum. If 70 percent is a passing grade in school (the minimum measure of success in education), then perhaps it’s fair to say that 84MHz of recouped TV spectrum — or 70 percent of 120MHz — would be considered a success for the auction. That’s 14 TV channels of spectrum that would need to be vacated nationwide, creating lots of business opportunities for an antenna vendor that helps to repack broadcasters vacating those channels into the remaining TV band.

The logical questions seem to be: why would SPX Communications walk away from so big a payday, and why would Sinclair be able to acquire such a seemingly big book of business at a bargain basement price? Perhaps, it’s because there won’t be anywhere near that many full-power TV broadcasters who decide to give up spectrum or go dark entirely.

(By the way, a couple of podcasts with Jay Adrick, now a consultant to Harris, are worth listening to, to gain some perspective on the size of the task facing the television industry, as well as the vendor and tower service communities resulting from a repack.)

Second, there are several logical reasons for Sinclair to acquire Dielectric’s assets, none of which have anything to do with a repack. One, is it’s a good fit with SBG’s existing RF holdings —Acrodyne Services — and expertise; another is the large percentage of the group’s 140 TV stations with Dielectric antennas; still another is SBG’s continued active support for ATSC development, including a recent announcement of its commitment to Mobile DTV, while maintaining a continued interest in exploring alternatives that may play an important role in a future U.S. transmission system, such as OFDM. Owning Dielectric’s assets and having priority access to its people and technology fortify SBG’s existing broadcast business and put the broadcast group in a unique position when it comes to the role it can play in development of future transmission standards.

Are there clues here about whether or not the incentive auction and repack will be a success? Only an expert tea leaf reader would know for sure. But the announcement that Sinclair is acquiring Dielectric certainly seems to offer a few hints and some things worth considering.

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Thursday 10:05 AM
NAB Requests Expedited Review of Spectrum Auction Lawsuit
“Broadcasters assigned to new channels following the auction could be forced to accept reductions in their coverage area and population served, with no practical remedy.” ~NAB


 
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