TV’s Next Gen Winner: LPTV?

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The voluntary roll-out of the next-generation broadcast TV standard known as ATSC 3.0 is generating a lot of talk at the world’s biggest tech expo and conference, the Consumer Electronics Show in Las Vegas.


Back in Washington, Mike Gravino of Airwaves USA, the entity born out of the six-year-old LPTV Spectrum Rights Coalition, is salivating. He believes ATSC 3.0’s benefits will give low-power TV stations, including Class A facilities, a huge boost.

In fact, he thinks LPTVs have a leg up on the full-power facilities owned by the nation’s biggest broadcast companies. 

As Managing Broker for Airwaves USA, Gravino has actively overseeing a four-month-long national auction of some 275 LPTV and Class A stations.

To date, seven have been sold. Because of the partial government shutdown, details cannot be disclosed.

That’s secondary news for Gravino. In his view, the true story is what LPTVs, including Class A TV stations, can do today with ATSC 3.0.

FCC regulations, he explains, allow any LPTV and Class A facility to shift to the next-generation broadcast TV standard with the flick of a switch. A full-power station cannot. Why? That would leave viewers largely in the dark, and prohibit MVPDs from retransmitting the ATSC 1.0 signal they rely on to redeliver to consumers.

“Low-power television can be first to ATSC 3.0,” Gravino says. “There are no restrictions.”

Because of this, Gravino expected TV station groups to turn toward groups like Airwaves USA. That hasn’t happened. Asking why may not be the question. Rather, asking why not is a better one. For Gravino, acquiring an LPTV or Class A TV station gives a big broadcast company a way to move ahead on ATSC 3.0 application far sooner than with a full-power facility, which could fully transition years from now.

CONTOUR CONQUEROR

In an analog world, LPTVs and Class As were also-rans, limited by weaker signals and battles to get the attention of the market’s dominant cable TV company or DBS provider.

With ATSC 3.0, a mountain of possibilities open up for the owners of such stations, Gravino explains.

Market tests recently conducted in Portland, Ore., which has a hilly terrain on the western side of the Willamette River, proved successful. “Field reports indicated that ATSC 3.0 signals reached places where, even in a mobile environment, the signal could be picked up. We’ve got the spectrum.”

In Washington, D.C., two Airwaves USA-held LPTVs, when combined, give an owner 12 MHz of spectrum to play with. How does this compare to owners of full-powered stations in the market?

“TEGNA is totally exposed on ATSC 3.0,” Gravino claims, with their WUSA-9, a CBS affiliate, the Northern Virginia-based company’s lone property in its home market. “They don’t have room to experiment.”

This explains Airwaves USA’s auction. But, was it a success, as 268 facilities of 275 remain unsold? “We took in $10 million in sales,” Gravino says. “It was profitable.”

Among the key buyers of low-power TV facilities in 2018 is HC2 Station Group, the entity led by Philip Falcone. The buying up of stations is over for HC2, Gravino says, and they’re now ready to build out the facilities.

Rumors point to HC2 as partnering up with another broadcast TV operator — one with full-power TV stations and a significant stake in ATSC 3.0’s rollout. Company names mentioned by gossipers include Sinclair Broadcast Group, Cox Media Group and The E.W. Scripps Co.

Falcone is no longer granting interviews with the press, fueling speculation that a partnership or outright sale of HC2’s entire holdings is in the works and could be done by the NAB Show in early April.

LACK OF DISPLACEMENT

The FCC’s first-ever spectrum auction resulted in the ongoing “repack” of several TV stations. But, Gravino points out, the majority of LPTVs were not displaced in the repack process.

That further helps bring value to stations many didn’t pay attention to until recently.

“Valuations have stabilized,” Gravino says. “An LPTV or Class A is valued today at $0.50 or $.60 per POP,” industry parlance for the individual viewer. “A full-market signal is valued at $1.15 per POP.”

Much of this value for the LPTV comes from what ATSC 3.0 can deliver. Until now, the LPTV has been sold on a 51 Dbu contour. With ATSC 3.0, that becomes a much more attractive 28 Dbu contour (the smaller number, the better). As such, Airwaves USA is selling 275 stations with more 170 million ATSC 1.0 TV POPs — or 240 million ATSC 3.0 POPs.

Then, there is mobile access of ATSC 3.0 signals. That is a huge factor, with these 275 facilities able to deliver close to 1 billion mobile MHz POPs.

“A LPTV will operate as well as a full-power station in ATSC 3.0,” Gravino promises.