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Sold, for $88 million!

Auction ends, spectrum goes for new services. Or whatever 9/22/2002 08:00:00 PM Eastern

Capitol Broadcasting's Jim Goodmon is full of ideas for digital television, but when it comes to the 12 licenses for cutting-edge services he bought last week, suggestions are welcome.

"I was hoping you'd tell me," he quipped when asked about plans for $1 million worth of spectrum rights Capitol acquired at FCC auction. In total, the auction garnered $88.7 million for the federal treasury after accounting for small-business tax credits.

Goodmon, Capitol's chief executive, rattled off options for using the spectrum, including a high-definition movie channel or datacasts to Palm devices.

"We're limited only by imagination," he said—and, he admits, a viable business plan.

The biggest winner was Aloha Partners, with $43.3 million pledged for 77 licenses. Continental Cablevision founder Amos Hostetter is an Aloha investor. Microsoft founder Paul Allen's Vulcan Spectrum won 24 licenses in the Pacific Northwest for $15.1 million.

The government is reclaiming the spectrum, at ch. 52-59, as part of its effort to convert broadcasters to digital transmissions, and offering their old analog channels for new uses. The auction winners are not entitled to the frequencies until incumbent broadcasters have completed the switch to DTV—2006 at the earliest. The spectrum can be used earlier if winners strike buyout deals with broadcasters. A variety of new uses envisioned for the frequencies include mobile Internet, but TV also is permitted.

Other than Capitol, which inaugurated the first regular DTV service on WRAL-TV Raleigh-Durham, N.C., the only broadcaster to play a major role in spectrum buying last week was LIN Television, another aggressive DTV station group. LIN chief executive Gary Chapman is chairman of DTV trade group, Association for Maximum Service Television.

LIN and partner Banks Broadcasting won 20 licenses for $4.62 million, covering the Providence, R.I.; Hartford and New Haven, Conn.; Austin, Texas; and Wichita, Kan., markets. LIN lobbyist Greg Schmidt said the new licenses provide insurance for stations in those markets, all of which have either analog or digital allotments on chs. 52-59 and may have faced pressure to vacate their frequencies early if others had acquired the licenses.

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