FLO Spectrum Sale Hints at UHF Spectrum Value

One of the precepts of the FCC's plan to reallocate up to half the usable broadcast TV spectrum for broadband is that the market value of the spectrum would be much greater if it's used for broadband rather than for broadcasting. If the price AT&T is paying for Qualcomm's prime FLO spectrum is any indication, the Federal Communications Commission may have a hard time convincing broadcasters to voluntarily give up their spectrum.

AT&T is set to pay $1.925 billion for spectrum currently used for Qualcomm's FLO TV operation. While that may sound like a large amount, consider that, according to the TWICE article on the shutdown, FLO was operational in 107 markets. Dividing 107 into $1.925 billion gives an average price per market of only $18 million. The price per channel would be less, as Qualcomm also owns Block E spectrum in some markets. How many TV stations would be willing to give up their TV channel for $18 million? In reality, they would receive much less, as the government would want its cut for deficit reduction. One possible reason for the lower price is this is "unpaired" spectrum -- there isn't a separate block of frequencies to be used for two-way communications. This doesn't appear to be a problem for AT&T, however.