Delta College Frequently Asked Questions About The FCC Broadcast Spectrum Incentive Auction

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1 Delta College Frequently Asked Questions About The FCC Broadcast Spectrum Incentive Auction 1. What is spectrum? The term spectrum refers to the frequencies over which signals can be transmitted for a wide variety of purposes from baby monitors and cell phones to television shows and more. Radio frequency spectrum is used to transmit electromagnetic signals for a wide range of uses, including microwave ovens, wireless microphones, maritime navigation, radio and television broadcasting, broadband services, and satellite communications. The Federal Communications Commission (FCC) manages this natural resource for both commercial and noncommercial use, assigning spectrum rights to specific license holders or classes of users. 2. What is the spectrum incentive auction? The FCC has called for freeing up more spectrum for wireless broadband use by using less spectrum for broadcast television. The FCC is holding an auction to buy spectrum rights and encouraging television licensees to sell their spectrum so it can be used by wireless carriers. The U.S. government will buy some or all spectrum rights that television stations are willing to sell. 3. Aren t the airwaves public property? Why is the government auctioning them off? Radio frequency spectrum is a natural resource, and it is public property in the sense that, for more than a century, the government has regulated use of the airwaves, just as it regulates the uses of public lands and the ocean floor within the nation s territorial waters. To help fulfill our country s need for greater wireless broadband access, the Federal Communications Commission (FCC) is planning to reallocate a portion of broadcast spectrum used by television stations to air programming and make it available for use by wireless carriers. 4. Who decided how WDCQ-TV would participate in the auction? Auction participation was determined by the station s owner, which for WDCQ-TV is Delta College. Since Delta College holds the license, the Board of Trustees were the final decision makers who approved participation in the spectrum auction, subject to limitations adopted by the board. The Board has given the auction careful consideration, evaluating what is in the long-term interests of the audience and the community. Numerous factors considered included the current and future value of spectrum, how many people in the area get their television programs only through over-the-air broadcasts, and WDCQ-TV s public service to the community. Broadcast Spectrum Incentive Auction Frequently Asked Questions Page 1 of 6

2 There are many uncertainties in terms of auction outcomes. Even though the federal government has announced an opening bid of $166 million for WDCQ-TV, Delta College understands that the spectrum rights may or may not be purchased, or that bidding could greatly reduce the price during the reverse auction. 5. What information did the Board of Trustees consider when making their decision? The President and Administrative staff developed an extensive analysis of the station, including its long history, finances and service to the community. There is a great deal of information to consider when making a decision regarding the future of WDCQ-TV, including the tremendous level of community impact it has offered for decades. The Trustees weighed the pros and cons of each of the options presented by the federal government, which included further analysis summarized by the administration. Pursuing multiple bid options is complicated; however the Board felt it necessary to fully study and analyze the possibilities and problems associated with the VHF move options, as well as hold open the options of channel sharing and channel relinquishment. 6. What decision did the Delta College Board of Trustees make regarding WDCQ-TV s participation in the FCC Spectrum Incentive auction? Following is the language actually adopted by the Board of Trustees on 12/08/2015: The Delta College Board of Trustees directs President Jean Goodnow, Board Chair Mike Rowley and Executive Director Pam Clark to take all actions necessary to participate in the FCC Incentive Spectrum Auction and implement the recommendations of legal counsel as set forth in their written legal opinions, on behalf of WDCQ-TV Channel 15. The Board directs President Jean Goodnow, Board Chair Mike Rowley and Executive Director Pam Clark to consider only: 1) exchanging Delta College s UHF channel for a VHF channel; or 2) relinquishing Delta College s television spectrum usage rights, if President Jean Goodnow, Board Chair Mike Rowley and Executive Director Pam Clark deems that it will have a positive financial and/or community benefit. To assist in decision-making, the Board directs the President that an engineering analysis be conducted to ascertain the viability of relocating WDCQ to the VHF spectrum. The Board further directs President Jean Goodnow, Board Chair Mike Rowley and the Executive Director Pam Clark to take all actions necessary to preserve the option of entering into a channel sharing agreement after the FCC Incentive Spectrum Auction. 7. What is the quiet period? By January 12, the FCC will get auction applications from stations. At that point, the FCC has imposed strict prohibitions of any public disclosure of auction strategies, bids or other details. Delta College and WDCQ-TV seeks to provide as much transparency as possible to our community. But, under anti-trust and anti-collusion rules, we will need to keep auction strategies, bids and other details strictly confidential, to avoid any legal issues imposed upon the College and station. Broadcast Spectrum Incentive Auction Frequently Asked Questions Page 2 of 6

3 8. Why does the federal government want spectrum in our area? Delta College s WDCQ-TV is located in the 71 st ranked Flint/Saginaw/Bay City TV DMA (Designated Market Area), which would seem to have little value as a spectrum clearing target. However, we are adjacent to Detroit (the 13 th ranked DMA), which has high demand for public spectrum. Our situation is further complicated by the influence of Canadian broadcasters on the moves available to the Detroit stations. Because of these factors, our smaller market is in an unusual situation, which could find us in higher demand than originally anticipated. The FCC has not determined how much spectrum it intends to purchase. That decision will affect how likely it may be that WDCQ-TV will hold great value in the spectrum auction. The auction will be competitive and the opening prices will quickly decline, once bidding begins this summer. 9. WDCQ-TV s local service For over 51 years, WDCQ-TV has been committed to public service in the Great Lakes Bay and Thumb regions. Our role is to harness the power of public media for the good of the community. WDCQ-TV uses technology and programs to educate, inform and inspire. The mission and fundamental purpose of WDCQ-TV will be unchanged during the spectrum auction and the staff will continue to provide the services that our viewers rely on us each day. 10. How will viewers be affected? In many areas, the FCC will not purchase any broadcast spectrum. In some more densely populated areas, the U.S. government will buy some or all spectrum rights that television stations are willing to sell. Some stations may continue to broadcast on a channel with less coverage or share a channel with another station. Some stations may cease operations entirely, and some communities may lose their public television service. 11. How will the spectrum incentive auction work? There are three separate but related elements of the spectrum incentive auction: a. Voluntary Reverse Auction: Television stations can volunteer to sell their spectrum usage rights to the FCC. The FCC will set high opening prices and progressively lower the price it is willing to pay for spectrum until enough stations drop out of the auction and the FCC can buy as much spectrum as it decides at the lowest possible price. The government will see how many and which stations are willing to give up spectrum rights before deciding exactly how much spectrum it will buy, and in which markets. The government may not purchase spectrum from every station that volunteers to sell. b. Forward Auction: Wireless broadband providers will bid to purchase spectrum. By federal statute, the difference between the amount the broadband providers pay and the television stations receive will fund up to $1.75 billion of stations repacking costs with the remainder going to the U.S. Treasury for deficit reduction and other purposes. c. Mandatory Nationwide Repack: Once the voluntary auction is complete, there will be a mandatory nationwide reorganizing of channels, or repacking, to condense the broadcast Broadcast Spectrum Incentive Auction Frequently Asked Questions Page 3 of 6

4 band. Any station on any channel in any market may be required to relocate to a new channel within the same band in a process that will take at least three years, given the length of construction time required. 12. When is the auction happening? The FCC plans to start the auction in spring of 2016 and expects the bidding to take a few months. When the auction is complete, the FCC will announce successful bids and bidders, as well as channel reassignments for all stations. This announcement would be in the fall or late The current FCC timetable calls for stations to complete channel sharing or go off the air within three months of the end of the auction. Auction guidelines call for all mandatory channel moves within 39 months of the end of the auction. 13. Will the FCC hold an auction in my community? Yes. Auctions will be held but the FCC will not necessarily buy spectrum in every community. In October 2015, nearly every television station in the country, commercial and noncommercial, received an opening price from the FCC that reflects the highest price the government would be willing to pay for its spectrum rights if the government decides it needs that spectrum. Delta College s opening bid price of $166 million is significant. But, it s the maximum, and is expected to decline during the reverse auction. 14. What will happen AFTER the auction is done? After the auction, stations will be reorganized, or repacked. Many stations, including those that did not participate in the auction, will be reassigned to a new over-the-air channel, although cable or satellite channels may not change. This may include moving to a VHF channel which some viewers may have trouble accessing. Over-the-air viewers will have to rescan their remotes to find local stations that are required by the FCC to change frequencies. 15. Why are television stations involved but not radio? Many broadcast television channels (channels 14-51) are assigned to a part of the UHF (Ultra- High Frequency) band, which is very conducive to mobile broadband service. FM and AM radio stations are assigned to lower frequencies (FM is on VHF, or Very High Frequency; AM is in MF, or Medium Frequency) that are not useful for wireless broadband service. The government wants to clear TV broadcast stations out of part of the UHF band (roughly, channels 31-51) as much as possible and wants to devote less spectrum overall to broadcast television services. 16. Can a public television station stop broadcasting over the air, yet still be available on cable and stream over the Internet? If a public television station stops broadcasting over the air, cable and satellite television systems will no longer be required to carry its programming. If a public television station stops Broadcast Spectrum Incentive Auction Frequently Asked Questions Page 4 of 6

5 broadcasting, it would lose the rights to stream over the Internet most of the familiar programs that are broadcast by public television stations nationwide. 17. If my public television station sells its spectrum, will it go off the air? Not necessarily it may change channels or it may go off the air. Stations are licensed to broadcast on a 6 MHz channel of spectrum. Each station can submit a bid to (1) give up its current channel but remain on the air by moving to a different channel on lower frequency spectrum, (2) give up its current channel and share a channel with another television station in the same market, or (3) give up its channel and go off the air. Viewers will be able to tune into lower-frequency or shared channels the same way they currently tune into channels today. 18. What if my station moves to a different channel in a lower band? Television stations are currently assigned to the low-vhf (channels 2-6), high-vhf (channels 7-13), or UHF (channels 14-51) band. Stations that agree to give up their current channel and move from the UHF to the VHF band, or from a high-vhf to a low-vhf channel, will stay on the air with reduced technical capacity. 19. Is Delta College s WDCQ-TV the only PBS station that may participate in the auction? It s unclear how many stations nationwide will be participating in the spectrum auction, however, there are other PBS stations who are in a similar situation. Michigan State University s WKAR-TV and Central Michigan University s WCMU-TV have both been authorized by their Board of Trustees to participate in the auction. 20. Will I still get public television in my community after the auction is over? In some instances, an interruption of signal could occur, and where stations stop broadcasting, there would be loss of service. 21. If my public television station participates in the spectrum auction, does that mean it won t need my support? Contributions from viewers have been and will continue to be essential to the long-term health of public broadcasting, so your continued support will remain critically important. Public television stations will have to use part of their auction proceeds to cover costs associated with channel relocation. Auction proceeds can help stabilize a station and allow it to provide additional public services that it could not previously afford. Although auction proceeds cannot sustain a station indefinitely, the dollars would allow WDCQ-TV to strengthen its financial footing and engage in new projects. The continued support of members, donors, underwriters and state/federal funding will remain critically important. 22. What happens to the money the station gets from the government and all the station assets, some of which were purchased with member donations? Broadcast Spectrum Incentive Auction Frequently Asked Questions Page 5 of 6

6 If a station s bid to go off the air is accepted, the government s one-time payment goes to the licensee. Delta College owns WDCQ-TV s physical assets, which could be sold or used for other purposes aligned with the licensee s mission, such as education or social service. 23. If public television stations channel share or move to the VHF band, will they still air on cable and satellite? Yes. Under the FCC s must carry and carry-one-carry-all rules, cable and satellite providers have to carry local television services, and these rules will still apply to public television stations moving from UHF to VHF, or from high-vhf to low-vhf (as long as the station still provides an over-the-air signal that reaches the cable and satellite facilities). 24. Will the repacking affect my station s coverage area? Repacking is mandatory. Any station on any channel in any market may be forced to relocate during the repacking process following the auction. The FCC is required by law to make all reasonable efforts to preserve the coverage area and population served by broadcasters prior to the auction. However, the FCC has determined that this allows them to introduce some new interference, which means that repacking may result in some loss of coverage area for some stations. 25. Can I send in my comments about what the spectrum auction will mean to me as a viewer? And, how would I do that? The decision has already been made to participate in the FCC Spectrum Incentive Auction, however the Trustees have tried to hold open as many options as possible moving forward. The Delta College Board of Trustees and the College President are always interested in receiving feedback from our community. Written comments may be sent to: FCC Spectrum Auction Delta College Office #B Delta Road University Center, MI Or to: Additional Information: Federal Communication Commission (FCC) LEARN: Corporation for Public Broadcasting (CPB): Broadcast Spectrum Incentive Auction Frequently Asked Questions Page 6 of 6

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