The end of last week saw the filing deadline for the Broadcast Incentive Auction Public Notice about the actual procedures to be used in the running of the auction. The sellers came out swinging with, including many of the major Class-A groups which are already in line to a multi-billion dollar payday.  So what gives?  Has not the lure of all of this money been enough to make these qualified sellers play nice with the FCC?  And what exactly has now gotten them to threatened the FCC with legal actions?  It's all about money, simply as that...check out this chart for an example from the filing by major Class-A license holder Local Media Holdings and Venture Technologies, which details what would happen in just one major media market if the FCC formula is used instead of the new proposed "freeze volume formula".  The new formula has been proposed through the filing of the Expanding Opportunities for Broadcasters Coalition (EOBC).  This research is based on the Cramton Expert Report.  

page 8, from the filing  by Local Media Holdings, LLC; Venture Technologies Group, LLC; and, Coachcella Communications.

SO WHY DOES THIS MATTER TO LPTV WHICH ARE NOT AUCTION-ELIGIBLE?  ISN'T THIS JUST THE WINNERS WHINING ABOUT NOT BEING ABLE TO HAVE EVEN A GREATER UNFAIR WINDFALL?

I really wish I could report the story the way the headline above reads, as I personally feel the pain from it myself, and know most of you LPTV licensees do also.  But here is the TRUTH!  Greenhill 1.0, the estimated closing bid pricing, showed us that the auction-eligible Class-A's, some less than 5% of all LPTV, could be receiving as much as $5 Billion in actual final pricing for their spectrum.  In Greenhill 2.0, estimated opening bid prices, we saw this number inflate 10X like all other opening bids to $50 Billion.  

And now with the proposed Freeze Volume Formula, and other factors, we could see those numbers go as high as $75 Billion opening and $7.5 Billion closing.  So, for our Class-A members this becomes a HUGE issue.  But here is why it is important for the rest of us which are not getting a payday in the auction.

The Coalition is just completing a study to come out later this week (SPOILER ALERT) that most of the Class-A's in the auction also own LPTV and a lot of new construction permits. What this means is that post-auction, there could be a huge new investment stimulus into these remaining remaining and displaced LPTV and not yet built permits.  This investment could easily total $500 million to $750 million or more.  The LPTV service has never seen this kind of capital infusion, and it can mean a heck of a lot of strong licensees in our space post-auction.  But of course, the investment will not be evenly shared around, make the strongest even stronger, and will create yet another two-tiered class system.  More when this research is released.  And good luck to the Class-A's in getting even a bigger payday!