National Proposed Rule Making
Tuesday - 12/2/14

The LPTV National Proposed Rule Making (NPRM) process officially started yesterday with a two-week extension granted by the FCC to the 30-day process.  So, instead of this legal writing exercise having to be done between Christmas and New Year's, the Coalition got it pushed back until January 12th.  Not that is matters much.  The die is cast, the cake is baked, and the goose is cooked for LPTV when it comes to the Incentive Spectrum Auction.
But more on this in a moment.

For those of you needing to review and download this new LPTV NPRM here is a link for it:  3rd LPTV NPRM  In this document the issues we need to comment on vary from when the 3500 outstanding LPTV construction permits should be built out, channel-sharing ideas, the digital replacement translators for the full-powers, how we all which are displaced in the auction process may file for a new channel assignment, if and how should the channel-6 radio services continue, the elimination of the analog tuners, and other related issues.

The Process Is Misleading
Major LPTV issues have already been part of the original Incentive Auction NPRM which came out in 2012 soon after the legislation was passed.  And when the related Report and Order was published this past summer our industry has been in a hot debate and is now filing the first round of numerous petitions for reconsideration.  

There is also the Unlicensed Operations NPRM part of the Incentive Auction rule making, which has a lot of LPTV concerns, and which we all need to be aware of. 

Now this is a lot for our industry to comment on all at the same time.  And it is only the entire future of the LPTV industry which is at stake.  But did you know that the LPTV part is all based on bad data, lies about what LPTV spectrum usage rights are, and a slight of hand trick to say that our spectrum is not worth anything?

When I first started lobbying for the industry I would hear all of the time from Congressional staff and FCC officials that the reason LPTV was not included in the auction was because our spectrum had secondary status, and as such it was not worth anything to the potential bidders in the auction.  When I finally understood what they were really saying I came to the realization that all of these supposedly learned public servants had drunk the same batch of kool-aid.  These folks could and still can say with a straight face that the 6-MHz of spectrum an LPTV licensee uses does not have any value, but that the 6-MHz one channel over licensed by a primary or Class-A station does.

What they all refuse to talk about is that the spectrum of an auction eligible license needs a special magic wand waved over it, and then it becomes special, and put into the proper format for the auction bidders to fawn over. What they do not say is that the spectrum the FCC recommended to Congress to be auctioned, and the spectrum the Congress authorized to be auctioned, just happens to be the spectrum with the highest and most stringent public service obligations!  But that magic FCC wand takes away all of those obligations, and that the courts will not care about that.  

And they continue to say LPTV spectrum does not have any value.  Well, here is the truth...

It is the same spectrum!  You already knew that?  Well, that makes you smarter than Congressional committee staff and senior FCC officials and Commissioners!  But what about this question?  If LPTV spectrum does not have any value, then why is the FCC proposing to auction LPTV spectrum in the auction?  From channels 51-38 (the 84-MHz plan), LPTV has nationwide over 2650 stations and permits.  That comes to 90% of the spectrum for the auction in that clearing scenario.  If the FCC goes for full 126-MHz clearing all the way down to channel 32, then LPTV will be supplying over 60% of all spectrum for the auction.

And did you know that the FCC's Greenhill Book values this LPTV spectrum for over $27 billion, yes billion!  So these smartest lawyers in the room in the Congressional Committees and at the FCC are doing the double-talk, the run-around, the circular argument, the double-con.  Now of course these folks know this, they are certainly not dumb, but they expect the LPTV industry to be dumb, because frankly we have acted dumb in the past.  But the facts are the facts, and this is a "once in a lifetime opportunity"!

Cue The Magic Wand...
OK, you got the picture now?  Same 6-MHz, less public interest obligations, FCC waves magic wand and can convert any spectrum usage rights into new spectrum usage rights, play the same con on those unorganized and poorly represented LPTV licensees, and keep drinking the kool-aid.  Has worked before, why not keeping doing it, LPTV will simply not get their act together to stop the auction.  They couldn't get it together when the Act was passed, didn't get themselves into the auction, couldn't even negotiate channel relocation funding.

So, if you are an LPTV licensee or hold a construction permit let's figure out what your spectrum is really worth.  Figure out your population coverage numbers, and then multiple it times $9.00 each. That is the baseline from the Greenhill Book.  That is what you are being ripped off for in the Incentive Auction process.  

But They Got Caught, and Now They Are Really Worried
Yes, they are really worried that we now know not just the con, but the value of our spectrum!  $27 billion and counting.  And the current AWS auction could make it worth well over $30 billion.  

But are you ready to give up and just let them take your part of those billions?  Are you just going to keep sitting on the sidelines and not get involved?  Not going to let your spouse, your kids, your investors, or your stakeholders know that you are not fighting for them about this?  You may not be able to see if from where you are, but we have them on the run.  They are starting to add up what the cost to the unlicensed economy will be by not including LPTV in the auction, and the delay in the auction due to LPTV not getting relocation funding.  They literally can not have an auction without the "worthless spectrum" LPTV now has licensed and permits for.  

So, What Can You Do?
There are only a small number of groups which have "legal standing" in the rule making process going forward.  Like the Coalition, they have filed in different phases of it.  But it is really only the Coalition that has the standing to make the best legal cases going into the Court of Appeals.  So I want you to consider supporting the Coalition's new LPTV Legal Defense Fund.

If you are a single station owner, trying to live with inserting ads into a couple of national networks, well, maybe I will send you some money.  That is a tough business model.  But this auction process can literally kill off your investment, so plan on saving $100 for the Coalition's LPTV Legal Defense Fund.  If you are using the time-brokerage channel lease model, are in major markets, you have multiple stations, many channels, and are a player in the industry, well get ready to put up $1,000 for our common legal defenses. 
And if you are one of the top-tier spectrum holders and station groups, you need to put up $10,000 or more.

But there are hedge funds out there who are now upset with me for starting to defend the industry and slowing down the auction, which means their speculative investments into flipping spectrum in the auction might not pay off until much later if at all.  They also need to help defend LPTV, it is the next part of the spectrum which will increase in value.

Collectively LPTV owners control over 60,000 MHz of the same spectrum as those that are auction eligible (15,000 MHz).  Time for the deep pockets to start to invest into LPTV, but you got to help defend it first!

And for the legal community which makes a lot in transaction fees from LPTV, well it is time for you all also to get more involved, and not just for billable hours.  Heck, we are raising money to pay you here!  

The network owners, the equipment manufacturers, tower companies, and other industries in the LPTV space, it is also time for you to get involved. And of course, if the Google-plex wants that unlicensed spectrum, and the wireless internet service providers want more TV white space, you too need to show us some financial love.  Help us help you!

Our goal is to raise $250,000 to fund the legal defense of our industry.  This will be used for research, filings, court cases, and advocacy.  Not much compared to what other groups spend.  But we got the facts on our side, and we got Congress ready to act in 2015, so we need to do our part.

Thanks, and call or email me if you have any questions or comments.  

Mike Gravino, Director
LPTV Spectrum Rights Coalition