FCC flashes cash at broadcasters ahead of wireless auction

The US Federal Communications Commission (FCC) is pitching broadcasters to join in on its upcoming wireless spectrum auction with the promise of huge payouts from mobile giants if the TV industry give portions of its broadcast space.

In a presentation (PDF) to broadcasters, the FCC said that local TV stations will be able to haul in payouts as high as $570m for selling off their spectrum rights in an upcoming auction event.

"The FCC has the ability to unlock spectrum value, through the reorganization of the UHF band that cannot be matched by individual private spectrum sales or leases," chairman Tom Wheeler said in a letter.

"Broadcasters who choose to participate can strengthen their businesses by funding new content, services, and delivery mechanisms."

The auction is part of a plan by the FCC to add more space for wireless broadband services in the US. By repurposing portions of the 600mhz spectrum block for wireless use, the commission is looking to improve coverage and quality of LTE and future broadband services.

According to the FCC, total payouts from the auction could reach as high as $45bn with top carriers such as AT&T setting aside huge piles of cash for the spectrum buy-up.

The biggest payouts will be in the major markets. Estimated payouts for Los Angeles could be as high as $570m, while New York could reach $490m and San Francisco $140m. Even on the low-end of the market, auctions in cities such as Milwaukee, Wisconsin and Monterey, California are expected to clear the $30m mark.

When the auction is complete, the FCC said that broadcasters can use portions of their haul to expand their operations and transition to new spaces on the spectrum. Earlier this year, the commission showed that TV stations can share space when it conducted a successful trial with two broadcasters in Los Angeles.

The FCC plans to conduct the auction some time next year. ®