The upper reaches of broadcast television will top out at Channel 30, if the Consumer Electronics Association (CEA) and The Wireless Association (CTIA) get their way. In a letter to the five FCC commissioners, they propose incentive auctions under which some broadcasters just go away, with all remaining stations between Channels 31-51 repacked into a new, narrower television band.
In a white paper prepared by the two organizations, they take a stab at putting numbers out there that they suggest might result if their proposals are adopted.
* They suggest that auctions for free spectrum could result in $36B in revenue for the US Treasury, and could bring in as much at $48B.
* Only spectrum in the top 30 markets will need to be cleared.
* They expect the amount paid to broadcasters in a spectrum auction would be between $1.2B and $2.3B, “conservatively” assuming all participating broadcasters get out of the business – the more that agree to channel sharing or cellularization, the lower the cost.
* Moving expenses for non-participating broadcasters to exit the upper channels is estimated $565M.
The paper concludes, “CTIA and CEA have presented above an attempt to model and estimate the impact of an incentive auction for 120 MHz of broadcast television spectrum. While the analysis concludes that substantial revenue would be realized from such an auction, the estimates are not intended to foreclose any potential refinements to the auction process or to create assumptions about how such an auction would be conducted. As previously noted, the purpose of this analysis is to provide a foundation for evaluating the important issues that is grounded in a sound and common understanding of the facts. In such respects, CTIA and CEA anticipate and welcome critical comment that tests the assumptions, inputs and conclusions described above.”
