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The government’s plan to bargain off advertisement spectrum to aggrandize wireless casework has alveolate Big TV adjoin Big Telecom at the FCC and in the halls of Congress. Some say the nation is adverse an apocalyptic accommodation crisis due to the admeasurement of adaptable devices, while others assert those fears are overblown. The anarchy has opened the aperture for base by TV base owners who aback acquisition themselves sitting on admired absolute estate.

There’s a affairs bacchanalia activity on in the high alcove of the TV dial, the abundantly abandoned cosmos of UHF stations fabricated up of abounding mom-and-pop owners who affiliated ago gave up appetite in favor of a mix of home-shopping and reruns like Matlock.

KTLN approach 47, which runs religious programming from a business esplanade in San Rafael, Calif., awash for $8 actor in 2011. In Boston, WMFP approach 18 (the call-letters angle for “We’re Media for the People”) awash in backward 2010, forth with addition San Francisco UHF station, for a appear $20 million.

“Suddenly it’s like ‘Beverly Hillbillies.’ It is like they begin oil on their property,” quips base agent Larry Patrick, who has been complex in abounding sales.

(From the pages of the Advance 26 affair of Variety.)

The affairs accept one affair in common: The stations are actuality biconcave up by clandestine disinterestedness and advance firms that are broadly believed to accept designs not on their assets but their airspace. They are speculators in spectrum — the allocation of the nation’s airwaves allocated by the federal government to alone advertisement entities in adjustment to abstain massive arresting arrest for TV and radio stations, as able-bodied as emergency communications services.

The sales compensation is advancing as the government embarks on an aggressive but abstinent plan to attract flailing stations to alarm it quits, put their spectrum up for bargain and allocation in the gain from the bargain to wireless firms; stations additionally accept the advantage to allocation spectrum or move to addition allocation of the band. Congress austere the outline of the plan aftermost year. An attraction is the abeyant for an bargain to accession as abundant as $20 billion, with gain acclimated to pay for a new wireless accessible assurance arrangement and for arrears reduction. That’s a politically fireproof way to accession acquirement after adopting taxes.

The catalyst for the auctions comes in allocation from the abhorrence that the U.S. is on the border of maxing out its broadband capabilities — or the apocalyptic abhorrence that one day our smartphones and iPads will go dark. Outgoing FCC administrator Julius Genachowski has been admonishing of a “looming spectrum crisis” anytime back he took the job in 2009.

The allurement auctions are so complicated in architecture that the FCC has enlisted Nobel Prize winners to advice actualize the models. But the complication seems to accept alone added to a Washington clutter to admission how the plan is ultimately agitated out, with wireless firms and abounding telecom companies afraid to see a quick alteration of spectrum, while broadcasters booty anger at what they see as a land-grab that will account their media and ball competitors, actuality engineered by the federal government. The plan may actual able-bodied assortment the approach calendar in abounding markets. It additionally marks a allegorical about-face from accumulation advice to one-to-one digital.

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“The FCC is saying, ‘We like your service. There is article atypical about advertisement casework with bounded programming that are confined a analytical accessible interest. But bodies are accepting your artefact in addition ways, and that trend is not reversing,’ ” asserts Rick Joyce, a adept D.C.-based communications advocate with Venable.

Joyce says the FCC is aggravating to get advanced of approaching needs. “Rather than delay for all the baptize to run out of the tub, (the FCC is) saying, ‘Let’s see if we can do ome affair now. … Let’s be honest about an avenue action for some association who accept been in this industry for a while.’ ”

The action over spectrum auctions has been heating up for the accomplished few years, pitting the lobbying orgs of Big Media adjoin Big Telecom in the halls of Congress. Of course, it has additionally opened doors for adeptness entrepreneurs who acquisition opportunities amidst the upheaval. Base owners accept the best in some cases of affairs off all of their spectrum allocation — which agency shutting bottomward a base absolutely and affairs off their airspace — or of administration spectrum with addition station. Broadcasters are afraid that giving up hunks of their spectrum will bassinet efforts to advance their own next-generation offerings such as adaptable casework and arresting streaming. NAB admiral Gordon Smith already alike alleged the abstraction a “spectrum grab.”

Says Rick Kaplan, a above arch of the FCC’s wireless agency who is now exec VP of cardinal planning for the National Assn. of Broadcasters: “We appetite this to be over; I anticipate there is no win for the advertisement industry in this auction. At the aforementioned time, we apperceive if this gets rushed, the aboriginal beneath the bus are the broadcasters. We appetite a counterbalanced process.”

The bargain of assertive stations aside, broadcasters absolutely don’t like the FCC accomplishment and its association that they are on the behind of old vs. new. Sure, there are stations that accept aback credible their ethics escalate, like a battered home in a gentrifying neighborhood, but abounding of those who accept to break in the bold will be affected to move. This “repacking” is bare for the FCC’s plan to work, as the UHF spectrum is abundant added admired for the wireless business than the lower-rung VHF channels. That may actual able-bodied beggarly that a UHF approach from 32 to 51 will be impacted in some way, although the FCC has not accomplished how it affairs to configure the spectrum and which channels will accept to be austere and which stations face affective elsewhere. It’s a action that is not as simple as alteration a logo; in some cases, stations would charge to physically abolish antennas and abode them elsewhere. The FCC is still devising an bargain plan, but the complication comes from aberrant appeal for wireless spectrum in altered markets, and disparate accumulation on the approach calendar based on which stations appetite to advertise and which do not.

There’s a host of added apropos that the advertisement antechamber and base groups accept been articulate about, calamity the FCC with comments. They ambit from fears that stations forth the borders of Canada and Mexico will not accept the aforementioned reach, to worries that a $1.75 billion armamentarium that Congress set up for alteration costs won’t suffice, to warnings that the “repacking” will abate a arresting or alike aftereffect in interference. Alike as the FCC and Congress are determined that accord in the bargain is voluntary, stations additionally brandish the anticipation of the accomplish the admiral ability booty if not abundant stations accede to sell.

“It is not agreed by any agency that this is activity to be a roaring success,” Joyce says. The NAB’s Kaplan, in fact, believes that the exchange is analytic the problem, pointing to a admission of contempo mergers and acquisitions amid telecom players and others that accord them admission to caches of spectrum.

Underlying all of the altercation over spectrum is the anticipation of a about-face in the antithesis of ability amid media lobbies. The NAB is one of Washington’s better barter groups, but the tech sector’s advance is putting it in anytime greater positions of influence, authoritative a acceptable case for Congress aftermost year to accept the bargain plan, alike as so abundant added legislation was ashore in gridlock. According to the Centermost for Responsive Politics, the NAB spent $14.5 actor on lobbying in 2012, compared with $12.4 actor spent by the Cellular Telecom and Internet Assn. The affair of spectrum was assuredly a big allocation of that spending.

Going through the all-encompassing files of comments to the FCC, it seems that anybody has an assessment on how to re-slice the spectrum pie. Performers, represented by SAG-AFTRA, argued for the affiliated adherence of two channels in above markets for the use of wireless microphones; Google, on the added hand, is acutely in conflict, allurement that such channels be unlicensed, and accordingly accessible for such casework as Wi-Fi. A ancillary affair is over the admeasurement of “guard bands,” the spectrum allocated to anticipate arrest amid the base spectrum and the new amplitude for wireless services. Genachowski is big on the abstraction of award added airwaves that can be committed to Wi-Fi, the actionable genitalia of the spectrum that are acclimated for all sorts of devices. But dedicating too abundant to bouncer bands, some orgs argue, will be a betrayal that can contrarily be auctioned off.

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At the centermost of all of this is Genachowski, who from the alpha has fabricated broadband, and wireless in particular, his top calendar account — which artlessly put him at allowance with broadcasters and assertive added “old” media lobbies.

Genachowski afresh appear affairs to footfall down, but is abrogation little agnosticism as to his legacy. Throughout his tenure, he has endlessly answer the abstraction of wireless as a centerpiece of the country’s communications future. This was credible in one of his antecedent moves, to actualize a National Broadband Plan.

Released in 2010, the plan envisioned a affiliated future, but additionally a spectrum crunch, a faculty of coercion in award amplitude if the country is to break aggressive and accommodated the appeal for mobile. The plan alleged for reallocating some 120 MHz of advertisement spectrum space, and proposed the abstraction of allurement auctions, abiding in bazaar forces. The framework about anon met with skepticism from broadcasters. After howls from the NAB and others, that plan was never pursued.

What acquired absorption in Congress was the abstraction that gain from the bargain would be acclimated to actualize a broadband accessible assurance network, aberrant in scope. But the advertisement lobby, as if to appearance its appliance as able-bodied as its efficiency, frequently reminds journalists of the role of stations in accoutrement and alerting the accessible of accustomed disasters. NAB acclaimed that during Hurricane Sandy, some adaptable networks went dark, but broadcasters were uninterrupted.

Genachowski says the FCC’s role is to ensure the basement to abutment a new economy. “There was a time back bodies anticipation that spectrum wasn’t scarce, and we would accept all we anytime need,” he said at a contempo aldermanic hearing. “Now we apperceive that the adverse is the case, and we accept some absolute challenges.”

The plan is to advance with the auctions abutting year, alike as broadcasters acquaint that the calendar is too ambitious.

But abounding are action that the auctions will happen, which is why investors like computer mogul Michael Dell are believed to be demography a abrupt absorption in stations. He backs a accumulation alleged OTA Broadcasting that has been abduction up channels.

LocusPoint Networks, backed by telecom pros, additionally is gluttonous stations, agent Patrick says, and afresh put in a bid for a San Mateo, Calif., accessible TV station. Preston Padden, above arch lobbyist for Disney-ABC and News Corp., is arch a affiliation of owners absorbed in affairs — dubbed “the affiliation of the willing” — but he declines to analyze who they are, except to say they accept added than 40 stations in above markets.

“The goal, ultimately, is to abandonment (the station) for a lot added than you paid for it,” Patrick says, abacus there’s achievement of affairs for two or three times the acquirement price. For some stations, the action for money appropriate now is too adorable to canyon up.

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Others are accommodating to banknote in later. Patrick mentions a base (which he won’t identify) in one of the top three markets that doesn’t alike get a bisected actor dollars in revenue, which is “turning bottomward offers of 50 to 60 million. … They appetite to comedy the auction. They apperceive what it is worth.” The owners accept they can get able-bodied over $100 million, he adds.

“It is like a gold agitation and it is like a huge rush, and it will apparently end after this year,” he says.

No one is absolutely abiding how abounding stations will accept to go dark, but abounding adumbrate that few if any will be above arrangement affiliates. Moreover, the appeal for the airwaves is not monolithic: A base giving up spectrum in a rural breadth is not as admired as one in a above market, area the advance in wireless appeal is abundant greater.

Given the political will on both abandon of the alley to apparatus big changes in commendations to spectrum, there’s little agnosticism such changes are on the border for the TV punch as added consumers embrace broadband options.

“The broader abstraction actuality is that after this, consumers are authoritative decisions on their own to get their advertisement artefact through addition agency rather than through over-the air,” Joyce says. “There is a advance of technology that is adamantine to ignore.”

Spectrum Crisis: Absolute or exaggerated?

Depending on who you ask, there’s either a looming spectrum curtailment or added than abundant airspace to accommodated the demand

Sounding the Alarm

› FCC arch JuliusGenachowski› Wireless tradeorg CTIA› Cisco Systems

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Skeptics› National Assn.of Broadcasters› Microsoft SpectrumObservatory

Studying the Issue› Rutgers U.› MIT› Virginia Tech



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