Spectrum: What Is It Good For?

Ten reasons why you need to care about the future of broadcasting, and why stations should consider holding on to their beachfront spectrum homes for the public interest’s sake, as well as their own 6/06/2011 12:01:00 AM Eastern

CBS says it will be getting a billion dollars in retrans
and reverse comp from TV station negotiations.
Station revenue has been climbing out of the hole
the economy dug for most everybody. And TV stations are
still the top destination for local news by various measures.

So it would seem broadcasters have a lot
to live for, as National Association of Broadcasters
President Gordon Smith argued in
these pages not long ago.

The forces marshaled against that broadcasting
future are just as adamant that all of
that is old news, essentially about the migratory
pattern of dinosaurs headed for the tar pits.

Cell phone companies and consumer
products manufacturers say the airwaves are
essentially wasted in the hands of broadcasters,
an aging technology that needs to make
way to allow thousands of apps to bloom.

Even cable operators and phone companies
are ganging up on over-the-air TV. One
study introduced to the FCC two weeks ago
as part of its review of retransmission consent
rules took off the gloves and delivered
some tough shots.

The FCC will likely get the authority to
pay broadcasters to exit, since that authority
will also allow the government to pay for
and build an interoperable broadband safety
communications network in the shadow of
the tenth anniversary of 9/11, which is a big
political motivator for action on that issue.

Some broadcasters will want to cash out,
particularly venture capital ! rms looking to
" ip and move on. But others have vowed
to stay. CBS, for one, has declared it is not
interested in selling out.

As broadcasters gather in D.C. this week
for their annual Service to America gala
saluting the best of broadcasting, here are
some of the reasons broadcasters should
want to stick around, and their audience
should be rooting for them.

POTS: As in plain old television service,
or in this case, not so plain, not so old television
service. Broadcasters ! nally have the
digital service, including bandwidth-hungry
HDTV, they worked for more than a quarter
century to get into TV homes less than two
years ago. That’s when broadcasters switched
to digital and the government wrapped up a
billion dollar-plus effort to ensure broadcast service for the elderly and minority and lower-
income folks who are disproportionately
consumers of over-the-air TV. The same arguments
the government made for taking care
of those viewers would still apply today. Not
everyone can afford pay TV, and that number
appears to be growing in a down economy.
Cord-cutters and “cord-nevers,” people who
never subscribed to a TV service, are on the
rise. That may be partly due to migration to
over-the-top rather than over-the-air video,
but even if 90% of viewers don’t get their TV
over the air, millions still do.

The Exploding Hispanic Population:
According to the census, the fastestgrowing
population in the country is the
Hispanic market. As Univision pointed out
in defending its broadcast life to the FCC, a
big chunk of those viewers are over-the-air
only. In Los Angeles, that figure is 30%. In
Houston, it’s 44%; Dallas, 50%. “The most
rapidly growing segment of the U.S. population
relies heavily on over-the-air television,”
says Univision.

Local News: TV stations continue to
be the go-to destination for local news, even
with the countless Web-based news operations
(and local cable news outlets) that have
sprung up to populate the vaunted broadband
space. A Pew Research Center Study
last fall found that 50% of the news audience
watches local TV news regularly, topping all
other sources. The FCC’s own future of media
guru Steve Waldman said recently that
local TV news is “more important than ever.”

Broadband: Yes, broadcasters can be
players in the broadband delivery business
by using their spectrum to handle cell traffic
at peak times, that is if the FCC would clear
them to make those deals directly. Sinclair,
for one, and Capitol Broadcasting for another
have argued that the FCC should not hand
cellular phone companies the keys to the
spectrum Lexus that is the broadcast band,
particularly when that means handing it to a
“handful of extremely large national providers
that are consolidating,” as Sinclair told
the FCC. Instead, they argue, broadcasting is
the only way to meet the demand for mobile
video, something they say the wireless carriers
themselves concede. “Since a broadcast
architecture will be required to meet demand,
there is no public policy rationale to take
spectrum already allocated for broadcasting
and assign it to wireless providers who will
develop their own broadcast capability.”

Emergency Communications: This
is not just playing off the recent horrific tornadoes.
And we know the NAB is always
touting broadcasting as a lifeline service
that remains vital in times of emergency. But
that’s because it is. While an interoperable
broadband emergency communications network
is still likely years away, broadcasters
have been supplying life-saving information
for decades. Turn on CNN during the recent
tornadoes, and often what you were watching
was footage from local TV stations with
rain boots on the ground tracking storms
and warning residents to take cover.

Mobile DTV: Broadcasters have started
rolling out mobile service using some of that
6 MHZ of digital spectrum. They will need
to be able to deliver their local programming
to mobile devices to remain a competitive
video service, and they will need spectrum
to do that.

Multicasting: Broadcasters are delivering
news and weather and minoritytargeted
programming and adding network
affiliates in smaller markets. Bounce TV and
ABC’s Live Well Network are just two examples
of leveraging digital spectrum into
multiplatform offerings; both services have
been gaining station channel deals in recent
weeks. The more relevant multicast channels
they can muster, the stronger their case.

3D TV Anyone: OK, at the moment the
DTV transmission standard does not support
broadcast delivery of 3D, but one in the works
does, and it will take spectrum to deliver. At
B&C’s recent Connected TV and 3D conference,
one executive pointed to an anticipated five-fold increase in the number of 3D sets
sold this year. And who knows, if the ! lm
industry’s growing 3D pro! ts are any indication,
maybe 3D could be the next HD (yeah,
we don’t really think so, either)—which takes
spectrum, too, as we may have mentioned.

ROI: TV stations spent hundreds of millions
to remake their business for the digital
switch, and under the assumption that they
would be able to recover those costs through
continued operations like multicasting and
mobile DTV. There has been some suggestion
from Capitol Hill that broadcasters may
not get “full value” for their spectrum when
they give it up for wireless.

To Spite Their Foes: OK, this one
is a visceral reaction to the harshness with
which some of broadcasting’s critics slam
them. Broadcasters should stick around because
it seems to stick in the craw of those
looking to take them behind the barn and
put them out of their misery. The Consumer
Electronics Association has branded them
“squatters,” while veteran spectrum reclaimer
Tom Hazlett, in an essay commissioned by
cable operators and phone companies and
satellite operators and others trying to lower
broadcasters’ growing retrans take, dismissed
them as “a needless expense, propped up
not by customer demand, technical efficiency,
or business necessity, but legacy regulation
generations outdated.” That is an “ouch”
that broadcasters can turn into a “touché” by
sticking around and showing them that, like
Mark Twain’s observation of the premature
publication of his obituary, “reports of my
death have been greatly exaggerated.”

E-mail comments to jeggerton@nbmedia.com and follow him on Twitter: @eggerton