Analysts thinks Super Committee makeup may put spectrum in play


Stifel Nicolaus has noticed, as did RBR-TVBR, that two of the 12 members of the Joint Select Committee on Deficit Reduction are tied to standing committees with oversight of communications matters, and which have legislation on incentive spectrum auctions pending. It believes that heightens the odds that spectrum revenue will be part of any action coming out of the Select Committee.

The Tech Daily Dose thinks that the presence of House Energy and Commerce Chairman Fred Upton (R-MI), and Senate Communications Subcommittee Chairman John Kerry (D-MA) increase the odds that the use of spectrum auctions to clear space for mobile broadband will be part of any deal considered by the Select Committee.

Broadcasters have numerous concerns. They want assurance that ceding spectrum for repurposing is entirely voluntary, that channel repacking does not cause any incumbents wishing to remain in business to lose contour, that they will be fully compensated for any costs associated with repacking, and that they will be able to offer the full range of expanded service that was the entire point of the recently concluded transition to digital broadcasting in the first place.

The battleground figures to focus on the very largest markets. That is where there is the most incentive for incumbent television stations to remain in business, it’s where there is the least available spectrum, and of course, it’s the most desirable location for incursions from mobile broadband wannabe providers.

In smaller markets where broadcasters would be more likely to participate in an auction, there is likely to be far less desire on the part of wireless providers to spend very much money for spectrum.

RBR-TVBR observation: First, let’s do the math. The $6.5B in deficit reduction cited by CBO is .0043% of the $1.5T target of this committee. Using potential revenue from incentive auctions to cure the deficit is like trying to get a sumo wrestler’s weight where it needs to be to switch to a career as a horserace jockey by clipping the nail of one pinkie.

On the plus side, at least there will be time for due deliberation on the matter, unlike the recently concluded debt deal where the possibility of hastily-conceived and damaging legislation was all too real.

We would hope that the presence of two legislators who are familiar with the incentive auction issue on the Super Committee would be a hedge against any rash decisions. But of course, we’re talking Washington – it will be incumbent on the NAB and broadcasters to continue to pull any and all available levers to make sure free OTA television doesn’t end up finding out what the underside of a bus looks like.