Before the Federal Communications Commission can hold auctions to sell mobile service providers licenses to use former TV broadcast spectrum, the FCC (News - Alert) has to convince TV broadcasters to give up their licenses to use the spectrum themselves.
Even selling spectrum rights does not necessarily mean a TV station puts itself out of business. Any participating station can relinquish its license in return for cash paid by a mobile operator, and also be able to use some other spectrum for its continued operations.
But as the first part of a two-step auction, each broadcaster must first decide whether it wishes to participate at all.
Up to this point, the FCC seems to have many unconvinced potential sellers, according to the Wall Street Journal.
One issue, aside from potential payments representing hundreds of millions of dollars in the larger markets, is that even stations that refuse to participate might be moved, in any case.
The auction is voluntary. Stations that choose to sell their spectrum can go out of business.
They can share a channel with another broadcaster. Stations might also opt to be paid less, but be relocated to a different channel.
But even stations that do not participate in the auction might find themselves moved to new channels in any case.
The incentives appear to be clear enough: “You will have to move to new frequencies in any case; you might as well take the money.”
The FCC has predicted the auction would produce revenue of $45 billion and free up 100 MHz of spectrum for the mobile operators.
In some major markets, a station selling its spectrum license could earn triple-digit millions. In New York, for example, a license sale might generate between $410 million and $490 million, the FCC currently expects.
In Los Angeles, the auction could generate $340 million to perhaps $570 million.
The auction is intended to free up spectrum in the 600-MHz band for use by mobile carriers who would be offered paired 5-MHz channels (5 MHz up, 5 MHz down).