TV station owners are keeping teams of lawyers and bankers busy as they evaluate their opportunities in the government’s upcoming 600 MHz spectrum auction. It’s a show well worth watching, because those opportunities will find their way to tower companies and equipment vendors soon enough.
The 600 MHz auction, also called the broadcast incentive auction, is a way to move low-band spectrum into the hands of those who value it most, the mobile network operators. The Federal Communications Commission will act as the middleman, buying the spectrum from TV broadcasters and reselling it to mobile operators. Net proceeds from the broadcast incentive auction will be used to fund public safety networks and to reduce the U.S. federal deficit.
Broadcasters who choose to participate in the auction have three choices: they can relinquish their spectrum and go off the air, they can relinquish spectrum and start sharing another station’s channel, or they can relinquish spectrum and start broadcasting on a different channel assigned by the FCC. Station owners have already told the FCC whether they will participate in the auction, and whether or not they plan to share a channel with another licensee after the auction.
Each local market will have a reverse auction and a forward auction. In the reverse auction, the FCC will set an opening bid. This bid is the maximum amount at which the government is willing to buy spectrum in that market. Stations will tell the FCC whether they would be willing to sell at that price. Then the agency will offer a lower price, and will note how many stations remain willing sellers at the lower price. The FCC will keep lowering the price until no stations indicate interest.
Next the forward auction will begin. Based on the input it received from the broadcasters, the FCC will set an opening price in each market and see how many bidders would be willing to buy spectrum at that price. The agency will adjust the price upward until it strikes a balance between supply and demand, and then it will finalize the sales price.
Once the sales are finalized the repacking process begins, and with it the opportunities for antenna vendors and tower crews. The FCC will repack full power and Class A TV stations that remain on the air so that they occupy a smaller portion of the UHF band. Congress has earmarked $1.75 billion for repacking, and some broadcasters think it could cost even more.
One thing is clear: many broadcasters will need to change the antennas on their towers because different antennas support different frequency bands. The 54-88 MHz bands support channels 2-6 in the United States, the 174 - 216 MHz bands support channels 7-13, and the 470-698 MHz bands support channels 14-51. The channels above 37 are set to go away as the spectrum is transferred to mobile operators. So antennas supporting frequency bands above 613 MHz may no longer be needed by broadcasters, and new antennas may be needed to support the lower bands.
Broadcast Antennas are a “Different Animal”
Broadcast antennas are much larger than cellular antennas, and have been described by the National Association of Tower Erectors as a “whole different animal” compared to cellular antennas. Kathrein is one of a handful of companies that makes these antennas, as several manufacturers left the market when the broadcast television market slowed down.
Now that construction activity on TV towers is set to pick up again, tower crews and antenna makers alike will need to be ready. Broadcast towers are among the tallest structures in the United States, and transporting massive antennas to the tops of these towers is complex and potentially dangerous work.
Not all the new broadcast antennas deployed as part of the repacking process will be placed on tower tops or side-mounted. Skyscrapers in most major U.S. cities support broadcast antennas as well.
The Biggest Repacking Process Challenge: The Schedule
Perhaps the most challenging part of the repacking process will be the schedule. The FCC plans to give repacked stations 39 months to migrate to new spectrum. Three years and 3 months is not long enough, according to industry veterans inside and outside the broadcasting business.
AT&T has questioned the 39-month time frame, and the National Association of Broadcasters has lobbied for more time. While 39 months might be enough time for a station to successfully clear its spectrum, there is concern that a shortage of trained workers will mean that some stations will have to wait. An even more serious concern is that the deadline pressure will prompt crews to send inadequately trained workers onto towers, jeopardizing their safety.
The National Association of Broadcasters estimates that 445 TV stations could successfully be repacked within a 39-month timeframe. But the trade association projects that 850-1,150 stations may need to move to new frequency bands.
The FCC may have to adjust its timeline once it knows how many stations will actually be moving to new bands. These numbers will start to emerge once the 600 MHz show hits the road in cities all over America. The reverse auctions are set to begin March 29.
Visit Kathrein at the NAB Show
Kathrein will be exhibiting the latest in Broadcast Antenna Solutions at the upcoming NAB show in April. Click here for a free pass or schedule an appointment with us at the show. See you in Vegas baby!