POST NAB SHOW RANT
OUTRAGE vs OUTCOME
WHICH MODEL ARE YOU OPERATING WITH RIGHT NOW?
Similar to the late Dr. Kubler-Ross stages of grief & dying, LPTV licensees, and their supporting industries, have also been going through various stages of grief as it relates to the Incentive Spectrum Auction. Classically these stages are defined as: Denial, Anger, Bargaining, Depression, Acceptance. With apologies to any of you who are, or who have recently been through a personal grief situation, let me make some comparisons to what various parts of the LPTV industry are going through right now.
A recent study has shown that these stages are not always experienced in sequence, although they mostly are. And depending on the personal situation, you can recycle through them as external forces come into play.
DENIAL - At our SAVE LPTV RALLY, a prominent LPTV attorney asked a question of me which was brought forward from one of the groups attending the event. He asked if I thought the Incentive Spectrum Auction was even going to happen. I get this question a lot, but mostly from those that are just coming to the realization that we are getting close to the final rules, and everyone else they know is now talking about it. Since we are now over 38 months since the legislation was passed, it still amazes me that licensees have not totally educated themselves about what the auction can do to their business. But we should not be surprised about this, some folks would rather just not hear the bad news and keep their head stuck in the equipment rack. In the past few months dozens of still analog Class-A stations have just started a mad dash to build out their digital facilities in order to qualify for the auction. So even the motivation of a potential huge payday is not enough until a deadline approaches. As we head into what could be less than a year to the auction, this phase may not be expressed a lot. Then again, licensees and companies who think they are smarter than most will stick with this line of reasoning. They usually also are the ones that try to pick stocks rather than buy index funds. What I have also seen is that some devious actors use denial as a way to herd the uneducated, and to create fear to their own benefit. One major broadcasting group, which will remain un-named here, has been doing this a lot. Personally, my own phase of denial happened during the time of the passing of the auction legislation. I thought for sure those working on it for LPTV would get it done. And back in 2012 when they did not, well that is when I got involved.
ANGER - Many LPTV licensees are still stuck at this stage, or recycle back to it when they need to. I come back to it often, especially when I sense an existential threat to my own investment and livelihood. Anger can be a useful motivator for action, but a poor replacement for purposeful action. Channelling your anger, rather than staying stuck in it, is the trick. There are a few very vocal and intelligent opponents of the auction, and proponents of having LPTV included in the auction, which are now using anger as their recruitment tool to forge relationships with licensees who have not yet made it past this stage. They then offer to investment into the future value of the license if their anger (and supposed legal arguments) will bring high new valuations to them. Trusting your business to the tales of a snake oil salesman who says his legal arguments can get you into the auction is not advised. So remember folks, do not do anything in anger, or under the influence of anger. Get past it into the next stage, or if you have been there, skip ahead to purposeful action.
BARGAINING - It took me from early 2012 after the legislation passed, all the way until March of 2014 to get through this stage, with occasional recycling back into the anger stage. Bargaining is the stage where many of the Coalition innovative concepts came forward to how to include us in the auction, how to utilize our spectrum in support of the national broadband plan, and how to protect LPTV in the repack. When anger arose, I threatened legal action. When we were presented with new rule makings, I conducted new research and developed new ideas. This was the time of almost constant bargaining to avoid our Congressionally mandated demise. Many LPTV licensees are at this stage, and as I did, cycle back and forth into anger, and depression.
- Those licensees who have been keeping up with what is going in at the FCC quickly get to this stage, and many have never left it. Most of these can be found to have remaining analog to digital construction permits, or new digital construction permits. They are so depressed that they can't bring themselves to even think about spending money on what might be a losing venture. Many others, myself included, cycle back into this phase when we can't understand why Congress would have 430 Class-A stations worth $65 Billion in opening bids, and could settle out at $6.5 billion. While the remaining many thousands of LPTV and TV translators worth only what cash flow they have, or what the market will pay for unsecured channel placements. Breaking out of depression, and stopping the recycling back into it is a major concern for our Coalition. This is why you read in these newsletters a lot of possibility thinking. What snapped me out of depression is when Media Bureau Chief Lake, at the Coalition's
2014 NAB Show Info-session
, publicly acknowledged the LPTV Right of Displacement (the "ROD"). I and others who heard this rather quickly transformed into the next stage - acceptance.
ACCEPTANCE - So here is where we are, and where I have been since April of 2014, a year ago. Accepting our fate as not being able to get into the auction. It is a good place to be, acceptance. It allows you the time and space to craft reasoned arguments, to stare down our enemies with the knowledge that the ROD trumps most anything the FCC or those which wish us gone and destroyed, can throw at us. About six months into the acceptance mode, I again did a major pivot into pushing for the auction to happen as fast as possible. Some of you freaked out for sure. And then when I predicted the 144-MHz clearing and that we would still be okay, more of you freaked out and let me know. There are good, well reasoned arguments which I can use to defend these changes and new positions. And I reserve the right to continue to express my anger, and to experience depression, and to develop new bargaining positions. But I am no longer ruled by them, and can find my way back to acceptance with a blink of the eye, and within a deliberate breath and exhale. This cycle can even happen within a single brief conversation, or 30 minute meeting with the Incentive Auction Task Force. But I now always get back to acceptance. For in acceptance that LPTV has the ROD, and acceptance that no matter what the FCC or Congress may try to do before the auction, or in the repack, the courts will also see what the ROD means, and LPTV will live to air another day.
Remember these words of wisdom from a major corporate leader..."y
should not define yourself as your past." For 30 years now LPTV has defined itself as "secondary". And no matter how you define it, or which legal description of it you use, our businesses and services are not secondary to anyone else. We have the ROD, and we have the right to find new channels, even if they are no longer there, as they were before. No unlicensed service has any right before us, and they must wait until we all find new homes in the repack. W
e all will see a better day. And that day may be a lot closer than you think.
I predict, boldly here in this newsletter edition, that any LPTV which wants to leave the business and get paid to do so, will be able to in 2016, the year of the auction.
How you ask? Well that is coming soon, so prepare yourselves to leave the anger stage, the depression stage, and the auction acceptance stage. And be prepared to enter a new stage of LPTV evolution...and forget 3.0 folks, that just is not going to be here anytime soon. The FCC will take over a year to go through the rule making for it, so late 2016 at the earliest for it. But get ready for SPECTRUM X, it is what many if not most of us have been waiting for. You heard it here first!