The FCC announced Friday it had met a milestone in its goal to convert TV broadcast spectrum into the wireless highway, a move some on Wall Street see as an ultimate benefit to broadcasters. FCC Chairman Tom Wheeler credited broadcasters’ strong participation and wiliness to sell off their TV spectrum for the agency meeting one of its key spectrum targets for the upcoming airwaves auction.
“Robust broadcaster participation is key to the success of the Incentive Auction. Today’s announcement reflects the voluntary decision by many broadcasters that this auction truly is a once-in-a-lifetime opportunity. The 126 MHz initial clearing target ensures that wireless carriers and other forward auction bidders have their chance to compete for the maximum amount of low-band ‘beachfront’ spectrum. The wireless industry has said it needs additional spectrum to meet growing customer demand and usher in the age of 5G. The broadcasters have stepped up and done their part to fulfill that demand.”
“I look forward to a robustly competitive auction and the vast economic and consumer benefits that await,” Wheeler added.
Broadcasters’ participation in the process has exceeded expectations. Bidding in the reverse auction is set for May 31, with a couple of trial runs scheduled before the long Memorial Day weekend, May 25 and May 26.
“Broadcasters are excited that the TV auction process is moving forward and that the FCC is being aggressive in its auction estimates. Now the onus is on the wireless industry to demonstrate there is significant demand for 600 MHz spectrum,” said NAB President & CEO Gordon Smith. “We look forward to the conclusion of a successful auction that preserves and sustains America’s vibrant free and local television business that is the envy of the world.”
CTIA President and CEO Meredith Attwell Baker responded to the FCC’s news with “CTIA is encouraged to see so much interest in the FCC’s incentive auction. She said the additional spectrum “will play a critical role in making spectrum available for 4G LTE and 5G technologies. We look forward to a successful conclusion of the auction this summer, a smooth repacking transition and securing access to licensed spectrum as quickly as possible to meet consumers’ mobile broadband demands.”
The Evercore ISI Telecom team of analysts of Tracy Young, Ivy Cong, Jonathan Schlidkraut, and Justin Ages, immediately issued a note to investors headlined “Broadcasters Should Benefit from the High Clearing Target of the Spectrum Auction.” They said, “We believe the news should benefit broadcasters, and while there is no direct read through for companies under coverage, those we believe well positioned for the auction include MEG Energy Corp., CBS, Tribune Media and Entravision Communications.”
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