Hello, Mr. Chairman?
Thanks for taking this call. We see from
an ex parte filing
this week, that you had a call with a couple of the lawyers from Microsoft. And that they want you to consider not just one vacant channel for unlicensed, but three channels!
Seems a bit excessive for an industry which can't get a positive score from the CBO, so we thought we would share with you how the Microsoft request impacts the 7500+ LPTV and TV translators, as well as the Federal Treasury.
First, we need to see what the 11 possible incentive auction band plans already are subsidizing for the poor unlicensed industry. You see sir, the 11 band plans range from 14 to 28 MHz for unlicensed already. If you then add in the "naturally occurring" vacant channel, and two more of the three that Microsoft wants, you get another 18 MHz. Now that means that unlicensed will have free, for no cost, 32 to 46 MHz, nationwide. That is a lot of prime beachfront spectrum for an industry that can't figure out how CBO can score it positively.
Mr. Chairman, I know your bean counters have not run these numbers, so hold on while we bring you up to speed...
1) Based on the CBO incentive auction scoring and projection, the average nationwide price of 1-MHz in one market is $2.5 million. So, a 6-MHz channel is worth about $15 million. To clear all 210 markets, everywhere, you need way more than one station in each of the the 210 DMA's. We estimate that you will need as many as 420 6-MHz channels to cover the entire country. Now for the 3 channels that Microsoft wants for free, well that is some 1260 6-MHz channels.
2) So, we need 1260 6-MHz channels to get 3 nationwide additional unlicensed channels. At $15 million each, based on the estimated incentive auction average clearing price, these 3 free channels come to $18.9 billion! If you just want to count 1 station lost per 210 DMA, then it is 210 x 3 = 630 channels x $15 million = $9.45 billion.
3) Now if we add this 18-MHz, plus the 14 to 28-MHz already set aside for unlicensed, guard bands, duplex gap, we get 32 to 46-MHz for unlicensed, nationwide. Again, if we take the conservative route, and use just 1 station lost for each channel in a market, it would be 32 x 210 = 6,720 MHz / 6-MHz = 1,120 6-MHz channels x $15 million each = $16.8 billion!
So, with this simple math, we can easily see that the unlicensed advocates, meaning Microsoft, Google, and their ecosystems, are robbing the Treasury of between $19 to $17 billion of potential revenues, just so they do not have to pay for a license. That's a lot of roads, bridges, and infrastructure projects which could be funded.
In closing, since I know ya gotta go, let me say that to take a call from Microsoft's lawyers to hear them plead for more corporate welfare, especially at the expense of the most diverse small businesses in broadcasting, well, I am glad you are doing your job, and I am not. Microsoft wants $18 billion of free spectrum - right, sure....FEEL THE BERN!