One of the things that I fear politicians don't understand clearly (or just choose not to consider) is that actions have consequences. The deal Wednesday to raise the debt ceiling and trim the budget certainly had clear consequences as the stock market dived, with the Dow Jones average falling more than 500 points in one day. Caught in this were many media stocks - a range of cable and DBS related stocks lost 3-7% of their value.
During the fractious debate, one of the 'revenue enhancements' that some politicians pushed was to fast-track plans to auction off a large portion of the broadcast spectrum to mobile operators, generating revenues that could be claimed as budget cuts (see earlier post). The idea of an auction is not new - there have been discussions for years concerned with how much spectrum will be converted, and at what cost in terms of current and potential uses by broadcasters. The concern is not so much about an auction per se, but that Congress would look at this solely in terms of maximizing potential revenues, without considering consequences or competing uses for the spectrum. The idea of using spectrum auction revenues was dropped in the final debt limit bill after an extensive PR and lobbying effort by the NAB, but other bills to push the auction have been proposed.
Identifying some of the potential consequences, the NAB suggested that more than 200 full-power local television stations would be forced off the air. Another concerned group is a coalition of low-power TV (LPTV) stations. LPTV exists by exploiting gaps in spectrum coverage, often providing minority-interest programming. The NAB indicated that as many as 3000 LPTV signals could be lost with the proposed spectrum grab, many of which target ethnic communities with foreign language programming.
These and other potential consequences should be considered and weighed in any decision on how much spectrum is to be reclaimed from TV broadcasters, and what alternative uses are considered.
Source: "Wall Street pounds cable stocks" Fierce Cable
"In spectrum battles, Mom & Pop TV loses", Gigacom