The Next Big Thing
TV airwaves: Moving TV out, mobile inBrian Cooley discusses why wireless carriers are chomping at the bit to buy available TV broadcast spectrum in an auction set to happen mid-2015.
[MUSIC] Television has always been the king of the airwaves. Imprints of man's never ending path of progress silhouetted against the ageless canvas of a sky. The era of television. This is CBS. [MUSIC] We are well into the 21st Century at this point, and the gross medium. Is mobile. In fact, some recent numbers crunched by eMarketer showed that mobile data growth has gone up seven fold. TV remained basically flat. Print and radio seeing pronounced declines. We need more space for the one that's growing. So the FCC has announced something called a Broadcast Incentive Auction. The incentive is cash being dangled in front of TV stations who will let go of their airwaves, put those into a lottery, and then allow the FCC to re-pack the usage of the airwaves making more room for wireless data. The focus here is on UHF Broadcast Stations that are on the air. And it's one of the mid to upper UHF channels. It's the so-called 600 MHz Band where they operate that is so tasty, because that kind of airwave. Tends to reach a long way, get through obstacles, work it's way around buildings, and do all of that very well. Companies like Spring and T-Mobile seem to have a paucity of this kind of spectrum. They're in higher frequencies that are a little more brittle, if you will, in their propagation. AT&T and Verizon on the other hand have a fairly good amount of lower frequency spectrum, that behaves well, like the 600 megahertz stuff. The problem is if you dissuade them from buying more of it, you then lower the amount of money coming into this auction which the commission needs to [UNKNOWN] the TV stations to give it up in the first place. Regardless of how this auction is massaged, wireless carriers need more spectrum to move data over the air. A recent Price Waterhouse Coopers study estimates that from 2013 to 2018, wireless data usage is going to go up 61%. Now a lot of the demand will be carried by putting new towers or additional bandwidth through towers. The kind that you see in your neighborhood and that you hear have all kinds of real estate and neighbor objections to their installation. There's also a push out there to use UHF channel 37. That particular slice to create a new area for wi-fi hot spots. Spots which may not sound related but it is. Because carriers are pushing hard now to move more of your smartphone traffic on to wi-fi. Hotspots that automatically recognise you as a customer. As you move around. And put less of a load on towers. Now as you can imagine this is a complicated and contentious process. Dealing with some public airwaves access. That have been in place for a long time. Moving them has always been a little bit touchy. Right now the N.A.B. the broadcasters association has a lawsuit filed to block the F.C.C.'s plan. Until that takes hold we have an auction set for mid 2015. In light of all this interesting study from GfK Research indicates a multi-year trend of Americans moving gradually but noticeably more toward air wave t.v. reception. Now a lot of these homes have always been rural homes. That's all they ever had. Take them out. What apparently accounts for the trim line up are cord cutters. People who are saying, wait a minute I want that broadcast airwave signal for local news and sports and then I'm gonna augment everything else coming off internet streaming and cut out the paid TV in the middle. Bottom line local TV stations have basically five options, they lay out like this. Stay on the air in their current channel, but the FCC might move that channel to defrag the airwaves after this auction. Move off of UHF, which is the choice spot for this data, and down to a VHF channel. Leave it's current channel, and share one with another station. Station. Leave broadcast and go to cable, satellite, or online only. Or take cash and leave the airways, keeping your station alive only on other platforms. This auction is historic. The first time broadcasters have been allowed to sell their allocated public spectrum. For a profit. Because it is that important to refarm it right now and allocate it to mobile data carriers. It's an indication that mobile data is central to our lives not peripheral. [MUSIC]