In 1982 the Federal Communications Commission (FCC), the chief regulator of American television, radio, satellite and other forms of telecommunication, created Low Power Television (LPTV). The purpose of LPTV was to provide local-oriented programming for smaller communities. 2,450 LPTV stations were created and licensed primarily to educational, religious and governmental entities. Entrepreneurs have had difficulty operating LPTV stations profitably as they never achieved significant viewership.
LPTV Operators Are Being Forced to go Digital
Following years of struggling, LPTV stations are now required to go digital. In 2009, Full Power TV stations were required to do the same. However, unlike Full Power TV stations, many of which are operated by large-scale telecommunications companies, LPTV stations simply don’t have the viewership to justify or the means to necessarily make this shift.
The first round of LPTVs operating on stations 52 and higher were required to go digital in 2011. The result — 275 of them gave up their licenses.
How the Digital Revolution is Affecting LPTV
A spectrum auction set for March 29, 2016 could see wireless carriers pay up to $60 billion for spectrum given up by Full Power TV stations. The 60% of spectrum not sold off will be “repacked.” Full Power TV stations are guaranteed relocation. However LPTV stations are not.
Wireless carriers facing projected 50% per year growth in demand for data traffic through 2020 are sure to gobble up the newly available spectrum. Community Broadcasters Association, an LPTV lobbying organization, estimates that up to 40% of LPTVs will go off the air.
LPTV Operators Are Filing Lawsuits
Since November 2015, several LPTV operators have filed lawsuits against the FCC stating unfair treatment.
Grounds stated in Mako Communications vs. FCC are that their rights are violated as LPTVs do not have an opportunity to sell spectrum as Full Power stations do, and unlike Full Power stations are not guaranteed “repacked” spectrum space. The FCC response stated “we originally granted LPTV stations secondary spectrum usage rights and they are, therefore, always subject to being forced off their channels by primary spectrum users so we are not revoking any spectrum rights previously granted.” On January 26, 2016 the FCC further emphasized that there was “explicit, full and clear prior notice that operation of an LPTV service entails the risk of displacement.”
Important Note: An LPTV provider has currently asked the Court of Appeals for an Emergency Stay that would delay the spectrum auction by several months. The FCC has been given until March 8 to respond. The outcome of this hearing could dramatically change the way LPTV providers respond to this issue.
What Options Do LPTV Operators Have?
Channel sharing may be an answer for some LPTV operators. Two or more could file a joint application to share a new channel. While the FCC is likely to provide a list of available channels an LPTV could apply for, the risk is that displaced Full Power TV stations will displace LPTVs through “repacking.”
No matter how all this shakes out, the spectrum auction is sure to be disruptive for LPTV owners many of whom did not realize their secondary status.
Miller Kaplan serves many media companies, large and small, providing revenue reporting software. We take pride in staying informed about all the issues affecting your business. If you have any questions we can help answer, please contact us today.
____________________________________
We highly recommend you confer with your Miller Kaplan advisor to understand your specific situation and how this impacts you.
