LPTV INDUSTRY OBJECTIVES
Thu. - Jan. 8, 2015
Practicing the Art of the Possible
During the past month I have heard from many Coalition members, media analysts, and the trade press asking what I thought this new year would bring for the LPTV industry.  My responses have been muted as I really do not have a crystal ball, and simply do not know what will happen.  There are huge economic and political forces at work which are creating a foaming sea on which our numerous but small sailboats are being shoved into menacing shoals and reefs.  

For the past 600 or so days I have through the vehicle of this "Coalition of the willing" trying to chart a course which would work for us all.  This has not been easy by any measure, although it has been fun trying.  I really did enjoy being yelled at in the halls of Congress by a senior legal counsel to one of the key Committees because I advocated LPTV become auction eligible.  I thought it a real hoot when one of the key TV industry lobbyists pointed his finger at me and said "LPTV was toast", and was not going to survive the auction.  And I truly enjoyed that senior FCC official telling me they had no answer or logic to back up their claims, but that it did not matter.

Within our industry I have been told by a so-called spectrum investor that he did not care about LPTV for use as TV and saw no value in participating in our Coalition. I have had others call and email me days on end for free advice and not step up to make a contribution to support the work.  And then there are others who keep writing checks because they know the research, advocacy, and lobbying must be done.

It took a while to gain the support of a lot of you - and of course we all know we do not agree on all of the issues.  So I am probably going to get someone mad at me when I suggest the following four key objectives for the LPTV industry in 2015: 

FOUR KEY LPTV OBJECTIVES FOR 2015

1)  Empirically prove to the FCC that limiting the auction to 84-MHz is the best course to take to have a successful auction as soon as possible.  What we need to show them with hard cold facts is that this would limit the many planned LPTV lawsuits. The reason for this is that it would ensure in most every TV DMA that enough spectrum would exist from 36 and below for the displaced primary stations moving from 51-38, as well as the displaced LPTV and TV translators.  Since 90% of the spectrum between 51-38 is now occupied by LPTV and TV translators, and only 10% is by auction eligible stations, we know this can be done.  Further, we also need to gain the support of the TV white space users and the unlicensed spectrum advocates who would have to see that it is in their best interests to agree.  What we need to explain to the FCC, Congress, and the TV white space and unlicensed advocates is that LPTV licensees will fight for their survival, and we simply do not care what we have to do to push back the auction until well into 2017 with our legal cases.  I do not care what the potential auction bidders think, nor for that matter any broadcaster or TV spectrum holder that wants a fast auction without due consideration given to LPTV.

So what does this all mean?  Limiting the auction to an 84-MHz clearing (51-38) means that there will be spectrum and channels to move to - it means survival.  First and foremost, without a new 6-MHz channel to displace to, we simply will not have a business.  So our first objective for 2015 is to promote a plan which provides the best outcome for each of the potential 4000+ displaced LPTV and TV translators a place to go to from 36-14, or in some extreme cases to the VHF.  

Just so happens the FCC is beginning to see the logic of this, but not because they are looking out for LPTV.  Seems that the only way to get "unimpaired" spectrum blocks nationwide is to do it within the 51-38 band.  And what we know from the current AWS auction is that these types of spectrum blocks will command the highest pricing in the auction.  An 84-MHz auction of unimpaired spectrum could now bring in well over $80 billion!

When you consider the considerable potential legal delay in the auction start-up, the far less revenues generated by greatly impaired spectrum which happens from 36 and below, first Congress, and then the FCC will start to agree that they should just do what they know they can, and stop wasting time and potentially harm the television industry.  The Republican Congress does not want during the next two fiscal years a lack of auction revenues. Unless the Incentive Auction happens in early 2016 they can not book the revenues for the 2017 or 2018 fiscal years.  

So, getting the auction done as soon as possible, and limiting it to an 84-MHz clearing is best for LPTV, for the FCC, for the Congress, and well, for everyone!  However...

2)  We must also push back the auction just long enough (late 2016) so that ATSC 3.0 can emerge, and then everything changes.  Now, the Media Bureau will not consider 3.0 until after the auction, but they may be forced into it through the marketplace.  Since the conversion to transmitters will be a relatively simple process (and should be coordinated with the displacements in the post auction repack), and the end user will simply have to plug in a dongle or consumer box, as millions are already doing now with Tivo, AppleTV, Roku, Chromecast, and FireTV stick, it is easy to see ATSC 3.0 being able to be jump started in 2016.  This means the LPTV lawsuits are key, and literally become the mechanism to win the day for 3.0.  It also means LPTV will not need to go for technical flexibility on its own, but get swept along for the ride. So LPTV does not need to ask Congress right now for flexible use authority, it will just naturally happen as part of the 3.0 implementation.  The FCC has tried to separate the auction from 3.0 implementation, but now with the delay into early 2016, and soon into later 2016 or 2017 due to LPTV, well, reality bites.

3)  Make sure all of the 3500 LPTV and TV translator construction permits have plenty of time to build-out post-auction, like at least until the 39-month primary build-out period is over plus one year.  Just as important is that the holders of construction permits need a channel to displace to.  Most of these are in rural communities which will greatly benefit from a local station.  And with 3.0, many new types of data services could also be provisioned.  The National Broadband Plan calls for exactly this type of deployment.

4)  Work with Congress to rewrite the Communications Act so that LPTV and TV translators are modernized and harmonized with the primary license holders.  There is a lot to do within this objective, but this is where MVPD must-carry rights, flexible use rights, and anything else which many LPTV licensees have been wanting can be advocated for.  

You will see that I did not mention including LPTV in the auction, nor asking for relocation funding.  While these are wrongs which should be fought for, they are outside of the basic 4 objectives.  

Advocating to be auction eligible for the incentive auction is a non-starter in Congress.  All they care about is getting the money in from the auction, and they simply will not listen to a reasoned argument about how including LPTV will increase the revenues. If the FCC agrees to the 84-MHz clearing, then they are correct.  Our research does however show that if they want to go all the way to a 120-MHz clearing then they need a way to get rid of LPTV so that our "right of displacement" does not clog up the remaining spectrum from 36 below.

The GAO study of impacts from the incentive auction on LPTV and TV translators will help determine in 2015 what, if any, relocation assistance we should get.  The problem is, the spectrum auction act as it is written, does not provide for it.  And since all legislation must now have a "pay-for" mechanism built into it, unless we can find a way to generate additional revenue methods, and not just more revenues, LPTV is stuck paying for its own moves.

Again, reality bites, this time for us.

So, the Incentive Auction Task Force can make a mid-course correction for LPTV right now, and I can assure them that the legal cases will diminish with the guarantees LPTV needs going forward.  But this is a fantasy to think they will do anything rational in this manner.  They and the Commissioners will be forced by the legal cases which are coming as soon as they are "ripe". Congress will be all over the FCC this session related to "process reform", and how LPTV has been treated is a poster child for it.  Also, the forces of the marketplace will continue to provide strong tailwinds towards our desired outcome.  

If you think my suggested 4 objectives are wrong, do not fit into what you need, or indeed do work for you, please let me now.  But make sure what you do propose or demand can be achieved, and has a logical path forward.  In 2012 we were in shock from what was going to happen to us from the incentive auction.  In 2013 we yelled, screamed, and made many demands from the powers that be.  In 2014 we offered well reasoned arguments and plans.  In 2015 we are ready to be reasonable, but are letting the FCC, Congress, the TV White Space and unlicensed spectrum advocates know that we will do whatever we need to do in order to survive.  


INDUSTRY NEWS

Wireless Expert Misses The Key Point
Well known wireless industry analyst Andrew Seybold delves deeply into the AWS auction and how it will affect forever how the government and marketplace think about the value of spectrum. Check it out, and see if you can spot where he makes a BIG mistake about our TV spectrum.

Channel 51 Displacements Continue To Happen 
Listen up those of you with licenses and permits between channels 50-38, it could and probably will take years for the winning wireless bidders to come calling and say they are ready to launch their new services.  Our friends over at AllNetLabs has some excellent info about what is happening to displaced channel-51 filings, which started their journey into operations 7 years ago.

Broadcast Law Calendar
David Oxenford, and his Broadcast Law Blog, have put together a comprehensive broadcasters legal calendar for 2015.  Check it out and see when you need to file so that you stay complaint.

Incentive Auction Rules Public Notice Comment Period Extended

This order extends the deadlines for comments and reply comments in response to the Public Notice on Competitive Bidding Procedures for Broadcast Incentive Auction.  The comment deadline is extended to February 13, 2015, and the reply comment deadline to March 13, 2015.

PDF Notice 

 

The CEA Misleads, The Coalition Responds

When we read what Gary Shapiro, the CEO of the CEA wrote in Las Vegas this week about the number of "exclusive OTA" viewers, we just had to reply with what we think is a more honest metric, "total OTA" viewers.

Las Vegas Review Journal Blog 

 

The Sale Of The Century

Public interest group, the Benton Foundation, leaps into the Incentive Auction debate with an article about the policy implications.  This article is the first I have seen from the public interest crowd which starts to mention the diverse and local LPTV programming and audiences.

Benton Blog 

 

Comcast Carries How Many LPTV Stations?

If you have been following this newsletter you know that the Coalition has asked for discovery within the Comcast & Time Warner merger about LPTV contracts from both of the merger partners.  If you do, then you also know that the FCC rejected our discovery request.  So our friends over at Across Platforms took up part of the challenge and have compiled a nifty database of what a combined Comcast/TW would look like in terms of LPTV carriage.

Across Platforms 


CES Panelists Ponder Telecom Rewrite
John Eggerton, over at Broadcasting and Cable, reports that, "

A panel of Washington players agreed Wednesday that updating communications regulations was necessary, but there was disagreement on how and why that should happen. T

hat came at a panel session on how relevant the Telecom Act of 1996 is in a soon-to-be all IP world. The House Energy & Commerce Committee launched a process in the last Congress to revamp the Act, and David Redl, counsel to the committee Republican leadership, said that chairman Fred Upton (R-Mich.) plans to hit the ground running in this Congress."

 

Changes To The FCC Incentive Auction Webinars Next Week

Here is the revised schedule for next weeks webinars...

>  Forward Auction Webinar:  Monday, January 12 at 10:30 a.m.

>  Reverse Auction Webinar:  Thursday, January 15 at 10:30 a.m.

>  Integration Webinar:  Tuesday, January 20 at 10:30 a.m.


DISH Unveils Cord Cutter Package With ESPN
The magnetic poles of the earth are beginning to shift, so get ready for ESPN and other key cable channels for only $20 a month!  Hey Charlie, how about buying up some LPTV air time and letting everyone know this is available!

WSJ Cord Cutters Guide To 2015
The Wall Street Journal does a nice job of laying out what you can do with a DTV antenna and a broadband internet connection.  Like we already don't know, but I thought you would like to see what they are saying.  
 
 

INDUSTRY STATISTICS AVAILABLE

Do you know how many LPTV and TV translator stations, licenses, and permits were bought and sold in 2014 (hint, about 200)?  By whom?  And for how much?  If you would like to have this data, and to support our LPTV research and advocacy work here in DC, then think about buying the Coalition's LPTV 2014 Transactions Report.  For $50 you get valuable industry information and help us conduct further research about what is going on in LPTV land.  The PDF Report will be emailed to you later this week.

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We Got Your Back LPTV!

Mike Gravino
Director
LPTV Spectrum Rights Coalition
(202) 604-0747
lptvcoalition@gmail.com