Incentive Auction NPRM & Plight of Low Powered TV Stations

While there has been a lot of discussion about the FCC’s October 2nd Notice of Proposed Rulemaking (NPRM) for the incentive auctions, the plight of low powered television stations has been somewhat neglected. These stations hold secondary licenses and are allowed to operate on their frequency allocation subject to them not interfering with the primary licensee of the spectrum.

The NPRM indicates the FCC does not plan to allow the low powered stations to participate in the incentive auction. This was not surprising as their participate was not clearly authorized by the Spectrum Act that authorized the auctions. But the FCC indicated it does not intend to allow them to participating in the repacking of the remaining television spectrum.

This would seem to suggest that any low power station on spectrum where the primary licensee returns their license to the FCC in the auction, or if their spectrum is repacked so their current frequency is no longer used for television, they will no longer be able to broadcast. The FCC seems to intend to allow some “displaced” low power stations relocate, but notes, “Only a limited number of available channels may exist following the repacking process, limiting the relocation options available to displaced low power television and translator stations” (p.119).

The difference which which the Full power and Class A stations are being treated versus the low power stations highlights the political nature of the decision to compensate the broadcasters. In the case of the low powered stations the FCC is suggesting it may simply exercise its power to reallocate the spectrum without compensation. They had the same legal ability to do that with the full power and class A station, but given the political and pragmatic issues involved with pulling the broadcasters’ licenses, Congress stepped in, via the Spectrum Act, to ensure the broadcasters were compensated.

It remains to be seen if the FCC will stand by the policy. If it does, it will be interesting to see if it decreases investors’ willingness to invest in businesses using shared spectrum or secondary licenses.