President signs broadcast spectrum legislation

President Obama signed the broadcast spectrum legislation this week after Congress bundled it into a compromise payroll tax break/unemployment benefit bill last week. The bill (aka H.R. 3630 - Middle Class Tax Relief and Job Creation Act of 2012) passed the Senate 60 to 36, and the House 293 to 132 last Friday.

After a long and contentious lobbying by proponents of both sides of the argument, Congress has finally given the FCC the ability to reclaim and auction broadcast spectrum from television stations that volunteer it. The final passage came without debate and after both Democrats and Republicans agreed it was the only quick way to raise the money necessary to pay for the legislation.

The FCC will repack the spectrum for television stations as they prepare for the auctions. As with so much legislation, the passage had little to do with communications policy and more to do with election year spending. The spectrum auction is projected to generate about $15 billion.

The legislation requires that the FCC make efforts to protect the coverage areas and protect against interference to broadcasters who choose not to give up spectrum. The commission is expected to move quickly to come up with auction rules. Some officials predicted the entire process could be over in as soon as five years.

The big remaining question is how many broadcasters will volunteer to sell their spectrum. After the vote, the “Los Angeles Times” asked several broadcasters whether they would participate. Virtually all said no.

“We have no intention of giving up spectrum,” Alan Frank, president and chief executive of Post-Newsweek Stations, told the newspaper. David Smith, CEO of Sinclair Broadcast Group Inc., which operates 74 stations around the country, said he “hasn’t heard of any broadcaster who has said they have anything for sale.”

CBS Chief Executive Leslie Moonves is on the record that he wants to keep all CBS spectrum. “It would hurt our business,” Moonves said at the last NAB show.

NAB spokesman Dennis Wharton told the Times that the stations likely to sell—“if any”—are the ones that offer truly niche programming serving a melting pot of immigrant populations. “The notion that an ABC or CBS affiliate would voluntarily choose to go out of business to help solve an alleged spectrum crunch is ludicrous,” Wharton said.

Many disagree with the broadcast executives, noting it is the owners, not the executives, who will make the ultimate decision to sell or not. It is felt by many government officials that smaller broadcasters facing a grim future of competition from the Internet and having to pay possible future taxes on the spectrum they use, will take what is a very good deal.

Philip Weiser, dean of the University of Colorado Law School and a former telecommunications advisor for the Obama administration, told the Times he expects smaller broadcasters to try to have their cake and eat it too by sharing spectrum with others. “It is a huge opportunity for them,” said Weiser.