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Frequencies for sale

Just over a year ago, the FCC released its long-awaited National Broadband Plan (NBP). For broadcasters, the plan means losing 120MHz, or 20 channels, of UHF spectrum. After all, Genachowski needs two things: billions of dollars and megahertz of spectrum. Without both, his tenure as chairman will be seen as a failure.

While one might think the idea of losing more spectrum would be loudly discussed between broadcasters, that does not appear to be the case.

Sure, the NAB has issued press releases. And, one could argue, it has said a lot of the right things. But overall, broadcasters themselves seem surprisingly quiet on an issue that could require 50 percent of today's UHF stations to either relocate or go off the air!

While pondering my perception of the industry's muted response, my friend Tore Nordahl provided an interesting technical discussion on how the FCC's frequency clawback might work. His excellent treatise on the FCC's spectrum grab is available on the JVC ProHD Executive Report blog. Much of what follows is based on Nordahl's paper.

Nordahl says that should the FCC be successful in taking back another 120MHz of spectrum, it means that since 1982 broadcasters will have given up 312MHz or 75 percent of their UHF spectrum. Furthermore, the FCC's plan will require 682 currently operating full-power DTV stations to be relocated or shut down. Says Nordahl, “This is more than 50 percent of all operating UHF stations.”

The report predicts that only about 1100 out of today's approximately 1784 DTV stations will be able to remain on the air after the proposed transition. This is because under current regulations, it is impossible to cram almost 700 TV stations into the remaining spectrum.

For the larger stations, having fewer competitors may be good. However, for those employed at the other stations, the situation may seem not so rosy. Equally important, viewers will have fewer station choices, and Nordahl argues those stations' signals could be of lower visual quality.

Assuming the FCC gets its desired 120MHz of spectrum, the issue then becomes deciding who gets to remain in business. What will be the criteria for selecting winners and losers? Nordahl suggests that one way to select the winners is to measure a station's effect on the local economy.

Under his scenario, survival depends primarily on the station's annual local payroll. The bigger the station payroll, the better. A major-market TV station with what Nordahl calls a “large-scale” HD news operation could contribute as much as $20 million to the local economy, just in payroll. Conversely, an “infomercial-rerun/non-news” station might have a payroll of one-tenth that amount. Nordahl suggests that “large-scale HD news stations are much more essential in protecting and growing the local economy than the infomercial-rerun/non-news stations.”

This is where Nordahl and I depart. No politician or bureaucrat is going to let the noncommercial stations, which typically have smaller staffs, be squeezed out by those big mean and greedy broadcast groups. One can hear the PBS cry now, “Big business is trying to kill Cookie Monster and Big Bird.” Genachowski's crew will ensure that tax-payer-funded stations remain on the air, no matter their staff size.

Nordahl's paper is worthy of a read and discussion at your next state broadcast group, SBE or SMPTE meeting. Without an open dialog and a search for reasonable alternatives, we can expect the FCC to impose a solution without our participation.

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