The NAB has pledged to cooperate with the FCC to bring the unprecedented spectrum auction program home successfully, while protecting the rights and signals of television stations that choose not to volunteer. Asked how many are willing, NAB/President CEO said he didn’t know, adding, “If there’s a stampede coming, we certainly haven’t heard any hooves.”
“I think it’s very clear that this is uncharted territory,” Smith told reporters in a Friday 9/28/12 conference call after the NAB’s historic auction NPRM announcement.
“I think it’s very clear that this is uncharted territory,” Smith told reporters in a Friday 9/28/12 conference call after the NAB’s historic auction NPRM announcement. “There has never been an auction of this type or magnitude before in the history of this country.”
On the topic of likely participants, Smith said NAB has not attempted a head count, noting that there have been a few deals that have the earmarks of spectrum speculation. RBR-TVBR notes that comments about speculators are themselves speculation at this stage of the game.
However, Smith said there have been no reports of large market television operators looking to exit the business – most are having great years and are looking forward to great years in the future.
The FCC is looking to have a Report and Order in 2013 and an actual auction in 2014. Smith commented, “I think it’s fair to say that it’s an ambitious timeline.” He cautioned that it is more important to get it done right than to get it done fast.
He noted the possibility that if spectrum problems become intractable in border markets where international treaties with Canada and Mexico are impacted, it is possible that auctions will be left out – however, that too is speculation, since the FCC has made no comment on the matter.
As for smaller markets, Smith told RBR-TVBR that there may be more volunteers in those locations ready to give up spectrum, but at the same time, no need for spectrum. The crunch is essentially a problem in major urban areas and smaller DMAs may not be involved at all.
The reverse auction, Smith said, is believed to be a process where the FCC tries to determine a basic price for spectrum by balancing what broadcasters are willing to accept to participate with what broadband providers are willing to pay. The idea is to find the point that achieves the most participation at the lowest price point. If it goes too low, broadcasters may stay on the sidelines, but if it goes too high, bidders may stay on the sidelines.
Smith noted that broadcasters opting to share a channel will be giving up capabilities that require a full channel’s bandwidth. The one-time cash infusion will come at the expense of giving up future options to provide mobile, ultra high definition and multicast programming.
Smith underscored NAB’s primary goal of protecting non-volunteers and making sure that broadcast and broadband have a balanced co-existence going forward.
RBR-TVBR observation: The FCC may have created more questions than answers in its spectrum auction NPRM – and it will be incumbent on broadcasters to join NAB and take full advantage of the FCC’s offer to participate in the process.