FCC Spectrum Auctions: Big Deal Or No Deal?

Broadcasters have three choices if they want to participate in the Federal Communications Commission's auction. They can give up their entire spectrum, two stations can share a channel, or a UHF station can move to the VHF band, a less desirable frequency.

But by sharing a channel, the station would be giving up a lot of its future, said National Association of Broadcasters President Gordon Smith said. "By matter of physics, stations that share a channel would be disqualified from mobile and ultra-high definition and they wouldn't be able to multicast. Channel sharing may get you short-term financial gain, but not long term opportunity," Smith said. FCC Chairman Julius Genachowski thinks the process will give broadcasters the certainty they need to make a decision and reassure those that want to stay in the business. "The desire is to have more certainty and clarity in advance of the auction," he said. Because an auction like this has never been done, what will happen is hard to predict. Once the buying and selling prices are set, the agency needs to figure out how to repack the stations into a smaller spectrum space. "Interference and signal contour protection causes us the greatest concern," Smith noted. "We're inferring what this means and how [spectrum auctions] will work, but we've not seen the inside of the black box and what decisions will be made. We're in the dark," Smith said.