In what's been called a once-in-a-lifetime event, the government next year is going to sell a whole bunch of wireless spectrum to cellular carriers — who will use those airwaves to build out newer, faster mobile networks. That means more capacity for cellphone calls, 4G LTE and other services you probably use daily if you have a smartphone.
Problem is, the feds can't do it without the help of the television industry. In order to pull off the historic auction, broadcasters must volunteer to sell off their spectrum rights to make room for the wireless carriers. So now regulators are hitting the road in an effort to convince broadcasters that it's in their economic interest to participate.
That roadshow began Wednesday with a slide deck. The presentation is being delivered to broadcasters around the country and shows how much money they might receive if they agree to join in the event. In some highly-prized areas, such as New York, TV station operators might get a windfall of as much as $490 million each in exchange for going out of business. In smaller regions, such as Tucson, Ariz., stations might win closer to $38 million.
These are optimistic numbers, Federal Communications Commission officials said. While the agency could have gone with more conservative estimates, the FCC has an interest in presenting the best possible picture to broadcasters, who will be meeting with FCC officials in the coming months to discuss the auction.
The report was prepared with the help of the investment bank Greenhill & Co. and based on internal FCC estimates.
"The package explains why participation is virtually risk-free," said a senior FCC official. "We expect compensation to be compelling for broadcasters across the nation."
Some broadcasters are already on board. Preston Padden, a former Disney executive who now leads a coalition of broadcasters intrigued by the auction, said the Greenhill report was a "highly credible, first-class piece of work."
"If the FCC does end up compensating broadcasters in line with the guidance in the book," he said, "we expect next year's auction to be a great opportunity for many television broadcasters."
A list of media markets and revenue estimates on a per-station basis can be found online at the FCC's Web site.