Incentive auction threatens over-the-air public TV service, says CPB report

By Doug Halonen

Though the FCC’s incentive auction next year might give a short-term financial boost to a handful of public TV stations, it could erode the field’s ability to provide over-the-air signals to all of the nation’s homes, according to a new CPB white paper that outlines policy implications for local decision-makers.

“Narrow financial calculations cannot measure the value of serving the educational needs of the nation’s children, providing trusted news, reliably delivering emergency alerts, presenting diverse viewpoints that would not otherwise be heard, and numerous other benefits provided today and in the future by the nation’s public media stations through over-the-air broadcasting,” says the report, “Facing the Spectrum Incentive Auction and Repacking Process,” released Thursday.

“Unfortunately, while the spectrum incentive auction and repacking process would address one problem (the need for more spectrum for wireless broadband), it would likely do so at the expense of public media’s ability to meet the mandates of the Public Broadcasting Act — undermining communities’ ability to address the policy dilemmas they face as well as the nation’s need for universal service and local content and diversity of programming in an increasingly consolidated media environment,” the report added.

CPB commissioned the white paper in April 2013 to help provide background and a policy framework for local pubcasters as they approach decisions about how and whether to participate in the FCC’s incentive auction, a voluntary proceeding that will be disruptive for broadcasters and TV viewers alike. Though stations can choose whether to participate in the auction, the FCC may move them to another channel during a process called “repacking,” which may require some stations to relinquish channels assigned to TV translators.

CPB and other policy advocates appealed to the FCC for special protections to preserve the universal availability of public TV programming via broadcast signals, but the commission declined to provide them.

“The CPB white paper warns of an existential threat to public broadcasting, if current policies are not adjusted,” said John Lawson, a public TV lobbyist who runs the consulting firm Convergence Services Inc.

CPB’s concerns center on the auction’s potential to create new “white areas” in public TV’s near-universal availability as a free broadcast service in communities across the country. Depending on decisions made by local licensees, viewers in big cities and rural communities would lose access to over-the-air public TV channels.

An estimated 59.7 million Americans — or 19.3 percent of all U.S. television households — rely exclusively on over-the-air television broadcasting, according to CPB. But reliance on broadcast TV varies widely across the country, ranging from 37.8 percent of TV households in Fairbanks, Alaska, to 17.4 percent in Houston and 12.6 percent in Memphis, Tenn.

The report elaborates on three key scenarios that could lead to loss of service:

  • if and when a licensee that provides the only public TV service in a market opts to swap its channel capacity for cash;
  • if the FCC opts to clear broadcast spectrum that’s now assigned to low-power TV translators, a decision that could disrupt PTV signals in rural areas. Across the country, pubcasters operate about 565 public TV translators, according to the report. CPB estimates that up to 40 percent of them may be required to move during the auction repacking process and that as many 200 PTV translators may go dark;
  • if and when local pubcasters opt to sell spectrum but continue broadcasting by sharing a channel with another local outlet.

CPB’s concerns about the auction’s potential to create large white areas are driven by the recognition that some stations providing the only pubTV service to major cities are controlled by universities and other entities that aren’t focused solely on public broadcasting, said Brent Nelsen, the CPB board member who chairs the corporation’s spectrum committee.

Though many committed public broadcasters are already keenly aware of the damage that any new white areas could have on the PTV system, Nelsen said, licensees that have broader missions than public broadcasting “may see in their own cost-benefit calculation that the money they could raise through an auction could benefit them in other ways. That would be worrisome.”

Public broadcasting’s representatives in Washington, D.C., tried but failed to persuade the FCC to include protections ensuring that the auction doesn’t create erode PTV’s national reach.

When the FCC released auction rules last month that made no exceptions for public TV, the Association of Public Television Stations, CPB and PBS issued a joint statement describing the omission as a “grievous error that risks breaking faith with the nation’s commitment to universal service for noncommercial educational television.”

The report lists 21 TV markets where the stakes for preventing white areas are highest. Each of the cities — from New Haven, Conn., to San Antonio, Texas, and from Raleigh, N.C., to Portland, Ore. — is served by a sole-service public TV licensee whose decision to relinquish spectrum would create a large hole in the system’s universal reach.

Spectrum map

(Click to see a larger version.)

Known unknowns

CPB’s Nelsen doesn’t know of any sole-provider licensee that plans to swap its channel for cash, but the report warns of the possibility. Licensees that may be actively exploring the option didn’t reveal their interest to the authors of CPB’s white paper.

“At this time, it is not clear how many licensees are planning to relinquish all spectrum rights for any of their stations,” the report said. “What is clear is that some licensees may ultimately find participation in the spectrum incentive auction to be attractive in some form, for reasons of financial distress, or where the licensee’s mission (for example, a university or a local school board) extends beyond operating a public television station, and proceeds from their participation in the auction could be used to strengthen or expand other perceived critical activities.”

One PTV station that has publicly confirmed its interest in auctioning spectrum is KCET in Los Angeles, one of four pubTV outlets in the market. The station is looking for a channel-sharing deal that would allow it to continue broadcasting.

“In today’s environment, it’s wise for all public television stations to be looking at every possible opportunity for revenue,” said the station in a statement last month. “KCETLink has contacted a consultant who is exploring what that situation would look like for us.”

Top execs at stations that provide the only pubTV services to their communities face a different set of considerations. At KCPT in Kansas City, Mo., one of the sole-service outlets identified in CPB’s report, President Kliff Kuehl said his station isn’t looking to sell all of its spectrum in the auction — even if the FCC needed KCPT’s channel 19 for the auction, something that does not appear to be the case.

In a sole-provider market like Kansas City, a channel-sharing deal might make more sense than cashing out altogether, Kuehl said. “In a market like ours, where you don’t have the major overlap of another public television station, here if you were going to do it [participate in the auction] you would want to do it with sharing with another entity,” Kuehl said.

Channel-sharing is “really not an attractive deal” for KCPT because the lost channel capacity would limit its ability to provide additional programming, Kuehl said.

“We feel lucky that we don’t think we’re going to have to do it,” Kuehl said.

Pubcasters elsewhere have not yet reached conclusions. “I’m just working to understand the process and the implications,” said Bill Stotesbery, g.m. of KLRU in Austin, Texas, another sole provider. “No plans one way or the other at this point.”

Lost in translation

CPB also warns that the auctions could deprive rural residents of over-the-air access to PTV broadcasts because TV translators that deliver pubcasting signals to remote communities could be forced off the air during the auction process.

Translators are low-power stations that rebroadcast signals to communities outside the reach of a pubcaster’s primary station. In its auction rules, the FCC extended protections to full-power TV stations — that is, it guaranteed that full-power TV stations that don’t participate in the auction will be able to continue broadcasting, switching to new channels to do so if necessary.

But the FCC regulations don’t provide similar guarantees to translators, meaning that some translators could be forced to go dark. If the FCC needs a channel that a translator is assigned to and there’s no new channel for it to move to, the pubcasting operator must relinquish the channel.

Pubcasters appealed to the FCC to provide preferential treatment to their translator applications during the auction repacking process, but the FCC rejected the request.

If pubTV stations lose the 200 translators projected in CPB’s analysis, “an extensive constellation of small ‘white areas’” will appear in PTV’s universal coverage map, the report says.

Idaho Public Television General Manager Ron Pisaneschi sees a potential for loss of service to some regions of the state. The network operates five full-power TV stations and 49 translators to deliver PTV service across Idaho, he said. At least half of the state network translators are “vulnerable” because they operate on channels that are likely to be cleared during the auction, Pisaneschi said. It’s unclear whether new channel assignments can be found for them, Pisaneschi said.

Downside to channel-sharing

The CPB report also warns of a downside to the channel-sharing agreements that FCC Chairman Tom Wheeler is promoting to broadcasters.

Under this option for auction participation, qualified stations can cash out existing channels and continue offering TV service through spectrum-sharing agreements with other stations in their markets. But this too could diminish the accessibility of pubTV’s over-the-air signals.

“If the FCC accepts a channel-sharing bid from a sole provider of public television service to a community, in which the participating station has agreed to share a channel with a station that serves a smaller or substantially different coverage area, it is possible that all over-the-air public television service to many thousands of Americans could be lost,” the report said.

Lawson, a former president of the Association of Public Television Stations who has urged pubcasters to hold on to their spectrum, believes that the threats to pubTV from the auctions are attributable in part to a miscalculation among Democratic political leaders in Washington. They have yet to recognize how a failure to preserve public broadcasting will harm their core constituents, including minorities, seniors, the economically disadvantaged and young adults who rely on free over-the-air broadcasting, he said.

“The Democrats in Washington are enamored of Silicon Valley and the wireless industry, but I hope that the public media industry can wake them up,” said Lawson, who added that he was speaking for himself, not CPB, which is one of his clients.

“With the auction, we’re taking spectrum from free, over-the-air services that will include mobile in the future and giving it to the gatekeepers and toll collectors so they can charge people for what they’re getting free now,” Lawson said.

Doug Halonen has covered Washington for more than 30 years for publications including TVNewsCheck, TVWeek, Electronic Media and Broadcasting magazine.
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