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Fox, Tribune, Univision, and Ion expected to sell spectrum


The Frog

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Fox and three other large TV station groups officially declared their interest in selling spectrum in the FCC incentive auction next year, visiting FCC Chairman Tom Wheeler and other agency officials last week with advice on how to make the auction most attractive to broadcasters, according to the groups' description of the meeting filed with the FCC last Friday.

http://www.tvnewscheck.com/article/82850/fox-other-groups-join-proauction-ranks

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Ion would really handsomely cash out if it sold all its spectrum nationwide. So many major markets that they would likely come away with a total sale price in the billions of dollars.

 

I can't right now but I'd love to tally up what Ion could fetch for all of its stations with the FCC bid report that came out last week.

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I think selling spectrum for a short term gain is incredibly stupid. I'm not sure what our next broadcasting standard will be but I'm not sure if it will work so well with a smaller channel width. Correct me if I'm wrong but I think the nations that use DVB-T2 have a bandwidth of 8Mhz while we here use ATSC as a different standard at 6Mhz. From what I've heard it seems like some groups are pushing the DVB-T2 standard like Sinclair as opposed to building one from scratch. If we do go to DVB wouldn't it be difficult to fit everything into a 5Mhz channel?

 

Would selling spectrum make a station less lucrative to potential buyers? If I was a buyer I'd think so.

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Is it possible that some of these stations could simply live on but only on non-OTA systems? After all they already have cable and satellite placement. One of the stations here in Detroit, WADL-38, is going to participate in the auction and then cease to exist which got me thinking about whether it absolutely has to vanish entirely.

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I think selling spectrum for a short term gain is incredibly stupid. I'm not sure what our next broadcasting standard will be but I'm not sure if it will work so well with a smaller channel width. Correct me if I'm wrong but I think the nations that use DVB-T2 have a bandwidth of 8Mhz while we here use ATSC as a different standard at 6Mhz. From what I've heard it seems like some groups are pushing the DVB-T2 standard like Sinclair as opposed to building one from scratch. If we do go to DVB wouldn't it be difficult to fit everything into a 5Mhz channel?

 

Would selling spectrum make a station less lucrative to potential buyers? If I was a buyer I'd think so.

 

Colombia is using DVB-T2 with 6MHz channel spacing — and they are pushing television services down to channels 14-20 or so with the tightest frequency allocation scheme in the world. Likewise Cuba's implementation of the Chinese DTMB standard uses 6MHz channel spacing, unlike the Chinese variant (and can be used on high-V and U frequencies, channels 7 to 51).

 

In Colombia, which is probably the closest case to what we would be able to use, the three public channels are on one mux, Caracol and RCN (which I believe offer multiple services, I believe even multiple HD services) are each on their own mux, and muxes are assigned for a new third national network and for the different regional services. Remember, DVB-T2 incorporates MPEG-4 compression, which while available for ATSC came too late for most American equipment or broadcasters to make heads or tails of it.

 

For a variety of reasons in the US it would be necessary to use a different virtual channel scheme than in most DVB-based countries (consistent numbering is simply not possible here, or in Canada for that matter, though Mexico could get away with it; could you imagine the confusion if NBC was on VC 4 nationwide and viewers from Seattle to Boston to El Paso were confused?). Most of the transmission layer proposals the ATSC took for 3.0 are based off DVB-T2 and its modulation.

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Ion would really handsomely cash out if it sold all its spectrum nationwide. So many major markets that they would likely come away with a total sale price in the billions of dollars.

 

I can't right now but I'd love to tally up what Ion could fetch for all of its stations with the FCC bid report that came out last week.

 

If Ion went all out and sold all of its stations in the incentive auction (not including the ex-Roberts stations and WWPX in Martinsburg, WV (VHF Station)) at the proposed maximum opening bid prices listed in the bid report linked above, it would get $17.594 Billion. And, under the median opening bids, it would get $14.135 Billion. Of course, as the report states, "In the actual auction, prices will be bid down in many markets and the actual payouts to many winning bidders will be lower as a result", but it would still be a very big payday for Ion.

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Colombia is using DVB-T2 with 6MHz channel spacing — and they are pushing television services down to channels 14-20 or so with the tightest frequency allocation scheme in the world. Likewise Cuba's implementation of the Chinese DTMB standard uses 6MHz channel spacing, unlike the Chinese variant (and can be used on high-V and U frequencies, channels 7 to 51).

 

In Colombia, which is probably the closest case to what we would be able to use, the three public channels are on one mux, Caracol and RCN (which I believe offer multiple services, I believe even multiple HD services) are each on their own mux, and muxes are assigned for a new third national network and for the different regional services. Remember, DVB-T2 incorporates MPEG-4 compression, which while available for ATSC came too late for most American equipment or broadcasters to make heads or tails of it.

 

For a variety of reasons in the US it would be necessary to use a different virtual channel scheme than in most DVB-based countries (consistent numbering is simply not possible here, or in Canada for that matter, though Mexico could get away with it; could you imagine the confusion if NBC was on VC 4 nationwide and viewers from Seattle to Boston to El Paso were confused?). Most of the transmission layer proposals the ATSC took for 3.0 are based off DVB-T2 and its modulation.

 

That's one of things I don't want to see happen domestically. I would like to see there essentially remain the same number total channels each with their own multiplex for the stations to program how they choose. I believe the current local stations would fight to their death if the FCC decided to follow a route that the UK and other nations where each analog channel got half a multiplex.

 

Is there anything stopping each current channel retaining their own multiplex?

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I think Tribune should keep all its NBC, ABC, and CBS affiliates except WHNT, and WTVR, as well as selling WGHP and KPLR. And for Fox I think they should sell KDFW to Media General (a.k.a. new Lin Media because them buying said station from Fox marks their return to the Dallas market), possibly Scripps (though not as likely as new Lin Media), or (dare I suggest) Sinclair. As for the rest of the Fox stations and the stations owned by Univision and Ion, I don't really know about who I think they should sell them to.

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I think Tribune should keep all its NBC, ABC, and CBS affiliates except WHNT, and WTVR, as well as selling WGHP and KPLR. And for Fox I think they should sell KDFW to Media General (a.k.a. new Lin Media because them buying said station from Fox marks their return to the Dallas market), possibly Scripps (though not as likely as new Lin Media), or (dare I suggest) Sinclair. As for the rest of the Fox stations and the stations owned by Univision and Ion, I don't really know about who I think they should sell them to.

Just so you know, we aren't talking about selling of stations to a different buyer. We are talking about station groups that may give up some of their spectrum to the FCC which then will sell the spectrum to cell phone companies. A station may sell all of their spectrum and opt to share a television channel or they may relinquish only a part of their spectrum. After the auction is completed the FCC then will start the process of repacking all of the TV channels and more than likely having them change their channel numbers.

 

Here's a presentation summarizing the incentive auction.

 

What follows may be something for Speculatron but since it deals with the incentive auction I decided to post it here. I know I said selling spectrum is incredibly stupid but if I was the owner of a station group (in good financial standing) I would only consider selling spectrum in the markets I had a duopoly in. I would need to know what our next technical standard would be before hand. Only if the next broadcasting standard has a bit rate that was greater than or equal to 40Mbps and has an efficient method of compression l would consider selling one stations spectrum. If the next standard does not meet that criteria I would probably slags one stations channel width. In this instance I probably would put the main program streams from both channels on the 6Mhz station and place the lower priority sub channels on the channel that I'd reduced in spectrum.

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Gee... do you think that some of that spectrum FOX wants to dump just happens to be on Channel 38 in Secaucus, NJ????

 

I doubt any of the major players are going to be dumping their "big" channels. Say goodbye to all the major market duopolies, though (What, you didn't think CBS wanted WLNY for their news team, did you?)

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Gee... do you think that some of that spectrum FOX wants to dump just happens to be on Channel 38 in Secaucus, NJ????

 

I doubt any of the major players are going to be dumping their "big" channels. Say goodbye to all the major market duopolies, though (What, you didn't think CBS wanted WLNY for their news team, did you?)

Do you think CBS will keep KCAL? KCAL appears to be loved more than WLNY.

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If Ion went all out and sold all of its stations in the incentive auction (not including the ex-Roberts stations and WWPX in Martinsburg, WV (VHF Station)) at the proposed maximum opening bid prices listed in the bid report linked above, it would get $17.594 Billion. And, under the median opening bids, it would get $14.135 Billion. Of course, as the report states, "In the actual auction, prices will be bid down in many markets and the actual payouts to many winning bidders will be lower as a result", but it would still be a very big payday for Ion.

 

Well, that's certainly a higher upper bound than I knew ever existed in television. That is an amazing number.

 

 

That's one of things I don't want to see happen domestically. I would like to see there essentially remain the same number total channels each with their own multiplex for the stations to program how they choose. I believe the current local stations would fight to their death if the FCC decided to follow a route that the UK and other nations where each analog channel got half a multiplex.

 

Is there anything stopping each current channel retaining their own multiplex?

 

"Half a multiplex" with something like MPEG-4 compression (and 256-QAM) is about as much as a full MPEG-2 ATSC multiplex in terms of available capacity. When Freeview HD launched in Britain the first mux had capacity for four channels. Adjusting for channel width (8 versus 6 MHz) that's three HD channels. That's even a little more than would be safely possible right now, as 2 HD + 1 SD (like certain Univision stations e.g. KTVW) is really pushing it.

 

 

Do you think CBS will keep KCAL? KCAL appears to be loved more than WLNY.

 

KCAL is on VHF.

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"Half a multiplex" with something like MPEG-4 compression (and 256-QAM) is about as much as a full MPEG-2 ATSC multiplex in terms of available capacity. When Freeview HD launched in Britain the first mux had capacity for four channels. Adjusting for channel width (8 versus 6 MHz) that's three HD channels. That's even a little more than would be safely possible right now, as 2 HD + 1 SD (like certain Univision stations e.g. KTVW) is really pushing it.

 

 

 

KCAL is on VHF.

Correct me if I'm wrong but when you replied to my comment about half a multiplex were you referring to the bit rate of Freeview at 40Mbps to our ATSC's rate of 19.3Mbps?

 

Thanks for correcting me about KCAL.

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Correct me if I'm wrong but when you replied to my comment about half a multiplex were you referring to the bit rate of Freeview at 40Mbps to our ATSC's rate of 19.3Mbps?

 

Thanks for correcting me about KCAL.

 

No, I was referring to the useful amount of spectrum available in terms of how many HD and SD streams can be packed in.

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The companies that SHOULD have their bandwith sold to the highest bidder are the TBNs, CBNs, DayStars, and the like since they are a waste in their current form offering little benefit to the viewing public other than fear-mongering and asking for their viewers' donations.

 

The flipside is, what these companies would do with the windfall of cash should they cash out? At least with ION, they could re-invest into something useful...

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The companies that SHOULD have their bandwith sold to the highest bidder are the TBNs, CBNs, DayStars, and the like since they are a waste in their current form offering little benefit to the viewing public other than fear-mongering and asking for their viewers' donations.

 

The flipside is, what these companies would do with the windfall of cash should they cash out? At least with ION, they could re-invest into something useful...

 

TBN's upper bound is just shy of $3 billion — certainly it's one of the larger station owners in the US. However I think the perceived religious value of broadcast ministry will keep these parties from seeing spectrum value.

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TBN's upper bound is just shy of $3 billion — certainly it's one of the larger station owners in the US. However I think the perceived religious value of broadcast ministry will keep these parties from seeing spectrum value.

 

On a side (but related) note, there's some infighting within the Crouch family, where Paul Crouch's granddaugher is suing the network and her relatives (uncle Matthew, cousin John Casoria, and the estate of her grandparents) over her and her husband being unjustly fired because they didn't want to take part of an embezzlement scheme by her uncle and other TBN execs.

 

It wouldn't much of a shock if Paul and Jan's kids/heirs cash-out, and take the TBN networks cable/satellite-only.

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If Fox unloads WWOR, those New Jersey politicians are going to be calling for Rupert's head.

And he'll be laughing all the way to the bank because this would be a 100% legal way to essentially move WWOR to NYC, while getting paid by the FCC to do so.

 

I would not be surprised to see this happen.

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This might be a longer post. But, I'd really like everyone to read the whole thing versus skimming over it.

 

First, I personally think the thread title (and the article that led to the threads creation) is a little misleading. Let me explain why I feel this way. For Starters I'm not sure how Harry Jessell jumped to the the conclusion that said broadcasters had "officially declared their interest in selling spectrum in the FCC incentive auction next year." The broadcasters in a post-meeting letter submitted to the commission outlining the discussion of the meeting(s) in written form made no such definitive indication. In fact, they stated that "As established broadcasters with deep ties and abiding commitments to their communities, they assign high value to their existing businesses and operations, and they intend to continue to serve their viewers with the same high level of service following the conclusion of the incentive auction. They noted, therefore, that their evaluation of whether and how to participate in the incentive auction necessarily depends on the adoption of clear and effective rules that maximize the value of the potential opportunity for all broadcasters." I bolded for emphasis. Are they looking into it? Yes. Is there a chance they will participate? Sure. But, that is far from definitive decision one way or the other.

 

Second, participation doesn't automatically mean the station will leave the air. Stations can opt to participate by agreeing to "channel share" with another station in the market. Stations can also participate by offering to move from UHF to VHF-hi, move from UHF to VHF-lo or, move from VHF-hi to VHF-lo. Also, just because a station participates doesn't mean their "bid(s)" will be accepted. And, the auction needs to satisfy several criteria before it can close. So, participation doesn't guarantee anything happening at this point.

 

WRT to two of the broadcasters mentioned in the article. It's worth noting that Ion makes some coin "leasing" out some of their subchannel space to the various shopping channels. Also, Univision is somewhat unique in that they hold national rights allowing them to broadcast a "national feed" via one of the O&O's on Cable/Sat providers. And, Univision is still owned by those PE firms looking for a way to cash out....so, there's that.

 

I think selling spectrum for a short term gain is incredibly stupid. I'm not sure what our next broadcasting standard will be but I'm not sure if it will work so well with a smaller channel width. Correct me if I'm wrong but I think the nations that use DVB-T2 have a bandwidth of 8Mhz while we here use ATSC as a different standard at 6Mhz. From what I've heard it seems like some groups are pushing the DVB-T2 standard like Sinclair as opposed to building one from scratch. If we do go to DVB wouldn't it be difficult to fit everything into a 5Mhz channel?

 

Would selling spectrum make a station less lucrative to potential buyers? If I was a buyer I'd think so.

The RF Channel width will remain the same. Each RF Channel is currently 6MHz and will remain 6 MHz post-auction.

 

 

Is it possible that some of these stations could simply live on but only on non-OTA systems? After all they already have cable and satellite placement. One of the stations here in Detroit, WADL-38, is going to participate in the auction and then cease to exist which got me thinking about whether it absolutely has to vanish entirely.

Yes, they could. However, if they surrender their license they would lose their "must-carry" rights. WADL and other smaller stations use that to gain carriage on Cable/Sat systems. So, there would no longer be a mechanism to force able/Sat systems to carry the channel. Without that they would have to negotiate carriage on Cable/Sat systems. If the Cable/Sat provider thinks the programming is worthwhile and they can come to terms with the station owner then it might live on. But, there is no guarantee of remaining Cable/Sat systems.

 

 

Or it could just be a lot of satellite stations of bigger stations that probably overlap anyway and in markets with high cable penetration. I could see Tribune selling KFCT, for example.

This was actually one of my first thoughts. And, as noted up post they could participate by offering to move from UHF to VHF for example. So, Fox could "participate" in Chicago by offering to move WPWR from UHF to VHF. They wouldn't make as much money as they would forgoing that RF channel altogether. But, if successful they'd still make some money and keep the full 12MHz they have now.

 

 

That's one of things I don't want to see happen domestically. I would like to see there essentially remain the same number total channels each with their own multiplex for the stations to program how they choose. I believe the current local stations would fight to their death if the FCC decided to follow a route that the UK and other nations where each analog channel got half a multiplex.

 

Is there anything stopping each current channel retaining their own multiplex?

The auction is strictly voluntary.

 

Stations will not be forced to give up any part of their 6MHz. Nor, can they "offer up" only a portion of their 6MHz in the auction. It's all or nothing.

 

However, with that said stations can opt to "Channel Share" with another station whereby they "share" one RF channel with another station. Essentially, one station will surrender their license while the other will become the "host" station for the surrendered station. But, These are private agreements that will be entered into between the stations prior to the auction. The stations themselves not the FCC will decide how they will divide the proceeds from the surrendered license. Likewise, the stations themselves not the FCC will decide how to divide the 6MHz RF channel. The only requirement is that each licensee maintain at least one SD program stream. Operational costs for the transmitter, engineering, etc. will be defined by their agreement. KCET and KLCS have already announced they intend to participate in the auction and have agreed to terms on a channel sharing agreement. I don't know the actual terms of the agreement nor, have they been announced publicly.

 

But, as an example lets just say they agreed to split auction proceeds evenly and KCET will be the "host" station post-auction. KLCS would also theoretically pay a flat fee to KCET for operational costs post auction. So, KLCS would offer up their spectrum in the auction. If they are a "winning bidder" (and all the auction closing creitera are met) KLCS would then be paid out the bid price by the FCC. KCLS would then pay KCET 50% of the proceeds they received to KCET per the terms of their agreement. Within three months of receiving their auction proceed KCLS would then (be required to) vacate their channel and "move" to KCET's RF channel. At that point KCET and KLCS will split the 6MHz (of KCET's RF channel) between themselves. And, KCLS will pay KCET the agreed upon flat annual "service fee" for all operational costs.

 

^This is also why SSA's won't go away anytime in the near future. And, I think that's partially why commission punted on SSA's when they issued the JSA order.

 

Just so you know, we aren't talking about selling of stations to a different buyer. We are talking about station groups that may give up some of their spectrum to the FCC which then will sell the spectrum to cell phone companies. A station may sell all of their spectrum and opt to share a television channel or they may relinquish only a part of their spectrum. After the auction is completed the FCC then will start the process of repacking all of the TV channels and more than likely having them change their channel numbers.

As noted above this is technically incorrect. Stations cannot "offer up" part of their 6MHz of spectrum in the auction. However, they can enter into agreements with other stations to "channel share."

 

 

Gee... do you think that some of that spectrum FOX wants to dump just happens to be on Channel 38 in Secaucus, NJ????

 

I doubt any of the major players are going to be dumping their "big" channels. Say goodbye to all the major market duopolies, though (What, you didn't think CBS wanted WLNY for their news team, did you?)

If Fox opts to "channel share" with WNYW (or anyone else) they would still have all the license requirements as the license wouldn't be surrendered. They would have to choose to surrender the WWOR license and leave the air in order to get out from under those license requirements. MNT programming would then likely move to a subchannel of WNYW. But, I don't think Fox is bothered by those "Service to New Jersey" requirements anymore. They have pretty well neutered WWOR gradually over the years anyway to the point that there isn't much left.

 

Likewise, if CBS chose to "channel share" with WLNY moving to WCBS' RF channel it would likely result in a COL change. And, as a result CBS would end up over the cross-ownership limits. That's part of the reason why they acquired in the first place. The way all the contours overlapped they were able to acquire WLNY without divesting any of their radio stations.

 

 

KCAL is on VHF.

VHF stations can still participate in the auction. Of course a VHF station would be much less desirable but, would still have value due to "daisy chain" effects. And, in theory CBS could choose to "channel share" with KCAL acting as the "host" moving KCBS to KCAL's RF channel. And, then offer up the RF channel of KCBS that is on UHF.
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The companies that SHOULD have their bandwith sold to the highest bidder are the TBNs, CBNs, DayStars, and the like since they are a waste in their current form offering little benefit to the viewing public other than fear-mongering and asking for their viewers' donations.

 

As opposed to the fear-mongering on, say, a certain cable "news" channel not owned by Rupert Murdock or Time-Warner...

 

Besides, it's the all-infomercial channels that provide little benefit to the viewing public. Those should go first, long before the religious stations.

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The RF Channel width will remain the same. Each RF Channel is currently 6MHz and will remain 6 MHz post-auction.

 

...

 

Stations will not be forced to give up any part of their 6MHz. Nor, can they "offer up" only a portion of their 6MHz in the auction. It's all or nothing.

 

...

As noted above this is technically incorrect. Stations cannot "offer up" part of their 6MHz of spectrum in the auction. However, they can enter into agreements with other stations to "channel share."

 

 

If Fox opts to "channel share" with WNYW (or anyone else) they would still have all the license requirements as the license wouldn't be surrendered. They would have to choose to surrender the WWOR license and leave the air in order to get out from under those license requirements. MNT programming would then likely move to a subchannel of WNYW. But, I don't think Fox is bothered by those "Service to New Jersey" requirements anymore. They have pretty well neutered WWOR gradually over the years anyway to the point that there isn't much left.

 

Likewise, if CBS chose to "channel share" with WLNY moving to WCBS' RF channel it would likely result in a COL change. And, as a result CBS would end up over the cross-ownership limits. That's part of the reason why they acquired in the first place. The way all the contours overlapped they were able to acquire WLNY without divesting any of their radio stations.

 

 

 

VHF stations can still participate in the auction. Of course a VHF station would be much less desirable but, would still have value due to "daisy chain" effects. And, in theory CBS could choose to "channel share" with KCAL acting as the "host" moving KCBS to KCAL's RF channel. And, then offer up the RF channel of KCBS that is on UHF.

Thanks for correcting me. I screwed this one up. I read a TVNewsCheck article a while back and they stated a broadcaster can sell "all or some of their spectrum" which I interpreted as reducing the channel width.

http://www.tvnewscheck.com/article/73223/broadcasters-need-hard-facts-not-hard-sell

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