FCC Threat to Public and Commercial TV -- What Everyone Needs to Know NOW About the Spectrum Auction

This is a post that affects every television viewer in the nation -- and soon. It's about the auction of the broadcast spectrum -- in very simplified lay terms, the way that television gets over the air from the station to your home.

And yes, the airwaves should be free

The spectrum auction will affect every station and this makes a huge impact on public broadcasters as well as stations with local news and programming operations.

It's important that if you care about a particular station, you let the license holder know that you oppose the sale of the spectrum. There are many details below explaining this but I warn you, the post is a little long and sorry, no photos. But please stay with it. Remember, all television stations, public and commercial, could be affected -- and THIS could affect your ability to view locally produced entertainment and news programs.

(International readers -- you might want to skip this one!)

Under the Radar

There's something going on in the world of broadcasting that to many is "under the radar" in that you don't see a lot of press about it and its ramifications. And, it may well affect anyone who enjoys television, with public television especially at risk.

It's called the FCC spectrum auction and it's happening soon. And by soon, I mean January 16, 2016 is the deadline for stations to commit to putting their spectrum up for sale.

I should start this by saying that although for 32 years I worked in public television, I have not received information for this post from leaders at WKAR (unless through independent and public sources), though it was vetted through other professional contacts. This is not a post about WKAR (although I use them often as an example). However, local readers should know that the MSU Board of Trustees, WKAR's license holder, have empowered MSU President Lou Anna K. Simon to make the decision as to whether or not to let WKAR go.

What Is a Spectrum Auction?

The spectrum auction is a plan to reallocate a segment of the broadcast spectrum used by TV stations, making it available for use for wireless carriers like Verizon, AT&T, Sprint, T-Mobile and others.  To obtain this availability, the Federal Communications Commission (FCC) is asking stations how much (if any) of their spectrum they will be willing to relinquish forever.

Wireless companies will bid to buy rights to use the spectrum. What is left will be "repacked"" and new channels will be reassigned to all stations, whether they participated in the auction or not. Some will have new channel numbers. Some stations will share channels (WKAR/MSU has declined to participate in sharing a channel -- it is all or nothing.)

For many that will mean a new tower and huge installation costs, some of which will be reimbursed, much of which may not be. Public and commercial stations requiring a new tower will go dark until a tower crew can be scheduled (there are a limited number of tower crews in the U.S. and if it's winter in your market, you may have a big problem because no one wants to be on the top of a broadcast tower when it's freezing and windy.)

Hey, I have cable! Not my problem!

True, many people are now watching television content on cable, satellite, smartphones and tablets or other mobile devices. But many -- particularly lower income families and minorities, who make up a significant portion of the over-the-air viewers (see below) -- don't have this availability. And for some -- namely me and maybe you -- we'd rather watch our Downton Abbey on the big television screen and not our computer or tablets.

The results of the spectrum auction will likely mean the end of universal free access/universal over-the-air (OTA) service. In other words, if you watch TV without cable or satellite, you're in big trouble. This will be most likely to affect the elderly, those who cannot afford cable or those who have chosen to only have OTA signals because they watch TV selectively, perhaps only their local news or a public broadcasting station. In other words, those who may need it the most.

So, if I have cable, what's the dif and why should I care? Because some stations will go dark, some will sell-off their remote transmitters. As a result some parts of the country will no longer have a public television broadcaster and its programming (or possibly a local network affiliate with news about your community). 

Public television has been built on the concept of "free and universal" availability so all people, regardless of income or personal preference, can view its programs. Loss of a public television station in an area could not only mean losing specifically local content but the availability for anyone to watch its programs without paying for it.

There's another ramification to this for public broadcasters who receive funds from the Corporation for Public Broadcasting (CPB), which must ask for annual reauthorization. When going to Congress for the badly needed funding required by local stations, representatives or senators from a "Dark Area" will be less likely to fund a so-called national public broadcasting service. This will make a direct impact on the quality and quantity of programming local stations may be able to purchase and produce.

And, according to WKAR's station manager Susi Elkins, in a comment posted on Facebook, a station that sells its spectrum would no longer qualify for CPB funding without an over-the-air signal, so such stations would no longer be PBS stations. Should the station continue to provide content and a schedule, they could potentially purchase PBS programming but not the national schedule. This would mean the loss of "must carry" regulations (which allow local stations to be carried on cable at no charge) so the station would need to pay to be carried on cable services.

Here are two important links that explain the spectrum auction. 

The first is an outstanding guide by Dru Sefton, editor of Current, public broadcasting's industry news publication. It puts everything into very logical and simple perspective. Remember -- while these links are public broadcasting-targeted, the auction also affects commercial broadcasters.

Here's a link to a video on the spectrum auction from the Corporation for Public Broadcasting and an accompanying article from which some of the material in this post is interpreted..

Why Am I Focusing on Public Television?

Forget that I had a career in public broadcasting or that I am world's biggest fan of "Masterpiece"and can't wait for "Downton Abbey" and "Sherlock" to return. As stated above, public television is provided free and over the air without charge to the user, relying heavily on individual support from donors as well as some corporate funding. Many stations are licensed to universities (such as WKAR, my station), while others may be licensed to a community or be a state network. (In state networks the legislature holds the funding strings.)

Public broadcasting stations are not "cash cows" for their owners. A university, for example, might gain many millions of dollars by auctioning off its station spectrum, causing the station to either go dark or eliminate subchannels that provide alternative commercial free broadcasting. (The "Create" service is a popular one for many stations.)

Why Would a University or State Sell Their PBS Station? 

 

Money. The prices being offered for spectrum are staggering. Our little station could be sold for as much as $208 million in what is called a reverse auction (Check Dru's article linked above for details on that). That makes for a pretty endowment for a university. As June Youatt, MSU's provost, told WKAR staff, the university has never received a gift that large. (Interest from an endowment from spectrum sold in our market at full price could be as much as $10 million a year; in larger markets the take could be much, much more.)

University licensees may well be pressured to sell. State universities might well be questioned by their legislatures why, when offered, the university did not pursue that kind of money. The question would be difficult to answer. 

And trust me, I've worked long enough on a university campus to know that when money is involved and dollar signs are glittering like wild cherries in a slot machine, the ethics of public service have been known to go flying out the window. (But don't start me on sports coach salaries when a well-respected music school in the same university would cut its music therapy program because of funding issues.)

In her Facebook comment, WKAR's Susi Elkins pointed out that in WKAR's case, the estimated $10 million a year is based on the highest valuation of the station. But since the process is a reverse auction, it is quite likely the total proceeds would be much, much lower, meaning the annual endowment interest would also be less. Elkins says experts predict stations might get half of the initial posted value.

The question is: All other arguments of public service aside, is it worth it to you to lose a station with so little potential gain? And particularly for universities, the other question is: Will picking up the dollars this way balance out the potential loss of endowment funds made in gifts to the university through station supporters. And my question is, can an endowment to a station presently in place be revoked by a living donor should the purpose of the donation (e.g., public broadcasting) no longer exist?

Where Does the Money Received Go?

The law makes no stipulation on how the dollars made from the sale can be used. Examples cited in "Current, public broadcasting's newspaper,  include a state government selling a station and using the funds to pave roads, while a university might build a new athletic dorm.

"Nothing in the law requires that funds received from selling a public media station must be plowed back into any other kind of public media," says John Lawson of Convergence Services, quoted in a Current article on June 22, 2015. (Lawson's remarks first appeared on the blog Convergence Services, Inc. and was reprinted in Current with Lawson's permission. You can find the entire Current article here.

In the same piece, Lawson also reminds us that minorities make up 41 percent of over-the-air-only homes, a number that is increasing. The impact of losing a public broadcasting station, renowned for decades for its educational quality children's television (with a boatload of statistics to back up its claims of the impact this has on America's youth) is significant.

What Can You Do?

Some stations, such as Columbus' WOSU, have been out in front to their members and viewers on this topic. Others -- not so much. (For local readers, WKAR is hosting two public meetings on January 4 and 11. Visit WKAR.org for more information.)

But the fact is whether it is a university's Board of Trustees, such as Michigan State or Ohio State or your state government that will make the decision of whether or not to sell their station's spectrum, it is important that they know how you feel about the possibility of losing your public broadcasting station or having its services significantly reduced.

Maybe it doesn't matter to you -- you may not watch public television or you might not have children whose skills were improved by watching its quality children's programs.

Maybe you don't watch local news on your network affiliates. Maybe you have cable and it doesn't matter to you so long as you still get your favorite networks, even if they are not local.

But if it does matter, these are stormy times on the broadcast horizon. It's important to find out who is holding the strings on your public television -- or commercial -- stations and let them know.

I know I'm writing to our university president (presmail@msu.edu) and Board of Trustees stating my opposition to the sale of WKAR and more than likely sending a letter to our local newspaper editors. If your station matters to you, please consider doing the same. Soon. The FCC deadline for station decisions on the spectrum auction is January 12, 2016, so time is of the essence.

For more information on the spectrum issue, please feel to check the articles I found helpful in preparing this blog post:

Current (public broadcasting publication) HERE and HERE. 

Guide to the Spectrum Auction is HERE.

A CPB white paper, “Facing the Spectrum Incentive Auction and Repacking Process: A Guide for Public Television Stations and Governing Boards (July 2014)” provides a comprehensive guide to the upcoming auction. This is geared toward public broadcasting professionals but may provide additional insight.

MSU President Lou Anna Simon's interview on this topic on WKAR Radio's "Current State" is here.  While the details pertain specifically to WKAR, the interview provides some insight into at least one decision maker's take on the issue.

(Gypsy fans, if you want more of a regular Marmelade Gypsy post, here's a Christmas wrap-up and coming next will be posts on my best books of 2015 and a Cork Poppers post focusing on wines of the Southern Hemisphere!)