Decoding the Spectrum Auction --- and What It Could Mean for Communities Craving Better News and Information

Last spring, the Federal Communications Commission began its long-awaited broadcast incentive auction. The FCC is urging television broadcasters to give up their channels and is then selling off the spectrum to wireless companies like Verizon and T-Mobile.

Across the country, state and local governments, along with public and private universities, hold noncommercial public television licenses that are likely to be part of the auction. According to the FCC, some of these licenses may be worth hundreds of millions of dollars. If they sell off their licenses, station owners could see huge financial windfalls.

Whether the public will gain anything from this major redistribution of the airwaves is an open question. These are the public’s airwaves, and their use has always come with public interest obligations.

Free Press believes that communities should benefit from the sale of these valuable resources. That’s why we just launched a new campaign at NewsVoices.org pushing for the proceeds from the sales of public stations to be invested in meeting local communities’ information needs.

So how does the auction work? It has two distinct parts: In the first phase (the “reverse” auction), the FCC will buy up licenses from both public and private broadcasters, with a strategic eye toward opening up valuable swaths of the airwaves. In the second phase (the “forward” auction), the FCC will auction off the cleared bandwidth to wireless companies or other commercial bidders.

To bring the broadcasters and wireless carriers closer together on a price, the auction began its second reverse auction round in September, closing in October with a new price of $54.6 billion. The second forward auction stayed steady at $22 billion, which means a third auction stage must begin. If the two prices fail to match yet again, the auction will move into subsequent rounds until the wireless companies offer to pay more in the forward auction than the broadcasters accept in the reverse auction. At that point, the auction will close.

While it’s going on, the auction is something of a mystery. Which public TV stations are taking part? Who owns these stations? And how much money do they stand to earn if they sell their spectrum licenses?

Stations are largely barred from talking about the auction — but they’re not prohibited from saying whether they’re participating.

Free Press recently set out to determine which public TV stations are taking part. We called every public TV station in the country multiple times to find out whether they were part of the auction. Here’s what we found:

•   54 public TV stations confirmed that yes, they are participants in the auction.

•   87 public TV stations confirmed that no, they aren’t participants in the auction.

•   40 stations refused to say whether they applied to participate.

•   104 stations didn’t respond to the survey.

For a complete list of stations that confirmed their participation, see our full report.

If all of the identified participating stations sell their spectrum at the maximum opening-bid prices, they could collectively earn over $14 billion. Since stations will likely sell for much lower prices than their opening bids, experts estimate the total will be closer to $6 billion if the auction closes after this stage.

At Free Press, we believe a significant portion of this money should be used to support community-driven projects, responsive local journalism, serious investigative reporting and essential public media outlets.

The auction presents an opportunity to establish long-term support for local journalism and community-information projects — and reverse a decades-long downward spiral in local news resulting from the collapse of the traditional advertising market, runaway media consolidation and severe public-media funding cuts.

Free Press’ News Voices campaign — starting in New Jersey — will educate the public about these auction opportunities and gather input from residents about ways to spend this money. Together we can build the popular pressure and political will needed to seize on this once-in-a-lifetime opportunity.

Check it out and get involved at NewsVoices.org.

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