PREDICTION
THE END OF THE ROAD FOR LPTV?
THE NEXT 150 DAYS WILL TELL US IF AND WHEN IT WILL HAPPEN
The rumor mill is buzzing with confidential information related to the Incentive Spectrum Auction and what will happen to our LPTV businesses, TV translator organizations, and spectrum investments in support of the National Broadband Plan. Some of the rumors are down right fascinating, some scary, and others are quite unbelievable. Rumors are like currency, can be bartered for other information, and used to manipulate the process. We all trade in them one way or another. Like passing on what we heard on one call, to another who we think will want to know about what we just heard. And then selectively sharing other information so that someone else will tell us what we want to know.
On Wall Street you can go to jail for this kind of trading of "insider knowledge", but in the world of rule making and legislation it is the currency of the Capitol. Classified secret information aside, the mundane world of FCC rule making is rife with the trading of information. The "ex parte" rules deal with much of this information, but one really never knows exactly what is going on. In Congress, the rules are a lot less defined, and as such, a lot less restrictive.
For small, independent LPTV broadcasters finding out what new regulations may be issued is key to making important business decisions, as it is with businesses of all shapes and sizes. Each little scrap of insider information has the potential to make or break a buying or selling decision worth in some cases millions of dollars. Knowing the timing of when decisions will be made can be very useful in negotiations of all sorts.
For example, should I sell the new LPTV digital construction permit I have had for years now, or ride out the auction and repacking process, and bet that it will be worth a lot post-auction? Or, should I buy that Class-A analog and build out its digital facility by May 29th, and bet that I will qualify for the auction? For large investors, they may be analyzing if they should even get involved in the LPTV spectrum sector at all, with all of the risks of being "secondary".
While the FCC is obligated to share publicly their official process, and suggest what the timing is for their rule makings, it does all depend on external factors like the courts and Congress. While the FCC is an independent agency, the Administration also does hold great political sway over the process. And finally the very industries which are being regulated and given huge opportunities, such as in the Incentive Auction, they actually have the most influence in that they tell the FCC and Congress what they are willing to spend tens of billions on, when, and under which conditions. We learn of this information from their ex parte filings, trade press reports, testimony, and their corporate presentations. But we do not know what is said behind those closed doors, or in those private calls, and neither should we, its how our system works, private industry.
But these are dire times for LPTV. We face an existential threat to our 30-year existence as a public service to the American people. The FCC is the steward of the spectrum we now occupy and license, and have permits to build on. They are charged with managing that spectrum for good of the country. The mobile broadband industry says it needs the spectrum we license for both licensed and unlicensed uses. The public interest groups agree, and so does Congress, the FCC, and most everyone else.
We can fight in the rule makings, we can threaten to fight in the courts, We can lobby Congress to fix the situation. We can advocate our viewpoint in the trade press. But at the end of the day, the fix is in and LPTV, TV translators, the non-auction eligible Class-A's, and all of the thousands of new digital construction permits are all at risk and like feathers in the wind.
But I want to share with you a couple of things I recently heard from well placed sources, so please don't pass it on to anyone, this is all suppose to be confidential...
1) Everyone is now scared of what the LPTV will do after our rule making comes out early this fall...like go to court, and then go again, again, and well, you get the picture. In three of the major Incentive Spectrum Auction sessions at last week's NAB Show, the threat of LPTV going to court was publicly mentioned as ways the auction could be derailed. Whether it is the noise we have been creating, the legal arguments, or the basic fairness of it all has just gotten to them, I do not know. Just don't mention it too much, we are not really suppose to talk about, the powers to be might get mad at us because we sticking up for our rights...
2) Some in Congress have a master plan to wipe out LPTV entirely in the rewrite of the Communications Act. This is common knowledge, and part of the plan. We have served our useful purpose and it is time for us to go. Sometime post auction they say. Funny thing is they forgot about our Right of Displacement (the "ROD"), and are now worried we might actually be around forever. They messed up when they all drank that "LPTV is secondary for everything" Kool-Aid stuff. But shhh, let's not pass this on, we are suppose to just deal with it...no point in getting everyone riled up.
3) LPTV licensees in major markets may have to literally fight each other with mutual displacement applications, negotiate to share channels, or actually have to bid against each for channels they have built and licensed for decades. The wealthiest and strongest will survive, everyone else will lose. Now don't tell anyone about this, it is suppose to be kept quiet.
3) There are those in the broadcast industry which are playing the LPTV industry, stroking it with some funding, organizations which are suppose to help it, but not placing the big bet on it by either helping to finance it, or enhance it with needed resources. They are painting a picture that they will be able to do a lot with our spectrum after the auction, and we need to be their friends. I have been told not to mention this, or else I won't get my taste of that after-auction pie like everyone else will. I only tell you because you may be tempted to be part of this wonderful future.
4) There is a new plan for an LPTV --------, which is now being shared with selected licenses, industry members, Congress, and the financial community. But I am not suppose to talk about this for another week, so shhh, don't say anything, keep this just between us, ok.
So, just between us, let's not tell anyone about the above. Just file it all away as rumor, speculation, and more crazy talk.
