American broadcasting company CBS might sell spectrum in the country’s upcoming 600 MHz incentive auction, scheduled for early 2016, its CEO Leslie Moonves said during a recent earnings call.
“Regarding the spectrum, obviously it’s something that…
American broadcasting company CBS might sell spectrum in the country’s upcoming 600 MHz incentive auction, scheduled for early 2016, its CEO Leslie Moonves said during a recent earnings call.
“Regarding the spectrum, obviously it’s something that we are looking at and we are interested in it,” Moonves said.
The move, which could fetch the broadcaster an estimated US$2bn, came after the lawyer for four other four major TV companies – Fox, Ion Media, Univision and Tribune Media – sent a letter to US regulator, the FCC, pledging their commitment to help it “achieve a successful broadcast incentive auction as quickly as possible,” provided certain conditions are met.
In the early February letter, the four broadcasters said they would take part in the incentive auction, which is designed to get them to surrender their low-frequency spectrum and sell it to operators, as long as the regulator sets a minimum 126 MHz spectrum target from broadcasters.
They also called for greater clarity and transparency with regard to the reverse auction pricing and greater flexibility in channel sharing, including the ability to enter into such arrangements following the conclusion of the auction.
Participation in the 600 MHz auction is voluntary and the FCC has recently embarked on some roadshows to persuade broadcasters to give up their spectrum in favour of telcos to cater for the ever-rising demand for 4G services.
New Street Research analyst Jonathan Chaplin said in a note that support from large players significantly increases the likelihood of the auction succeeding and taking place early next year as planned.
In his view, Sprint and T-Mobile would particularly benefit from a larger auction as it would allow them to purchase more spectrum at a lower price.
However, he argued, a bigger tender could be a mixed blessing for larger rivals, AT&T and Verizon, which last month spent US$18.2bn and US$10.4bn respectively in the AWS-3 spectrum sale.
“It is good because these carriers have tremendous capacity needs. It is bad because this isn’t the spectrum they need most and because the two challengers will likely be strengthened through this auction,” Chaplin pointed out.
Last October, the FCC postponed the 600MHZ auction from mid-2015 to early 2016 due to its complex structure.
In August, the US’ National Association of Broadcasters’ (NAB) had launched a lawsuit against the regulator, arguing that the auction rules would diminish broadcasters’ coverage areas and could result in lower viewership.
The case is still pending although the FCC expects it will be resolved by the first half of year.
