Philly TV stations face secret auction of their airwaves; Comcast could be a buyer

Telecom carriers bid $864 million for TV airwaves in Philadelphia in the first round of a secretive federal auction that transfers wireless spectrum from NBC, CBS, Fox, ABC, and other over-the-air TV networks to wireless carriers for data-consuming smartphones.

The auction - the "last, best chance for [wireless] competitors to get spectrum," said telecom analyst Craig Moffett - allows TV broadcasters to voluntarily cash out of their spectrum and close down.

TV stations also can relocate broadcasts to new frequencies on the TV dial. About 10 percent of U.S. households still watch just over-the-air television, according to the Federal Communications Commission.

Dennis Wharton, spokesman for the National Association of Broadcasters, said Wednesday that hundreds of television stations could sell their spots and voluntarily go out of the business with the auction that is expected to wrap up later this year.

Television stations that remain in business will broadcast in a more crowded spectrum band, and "our concern is . . . there could be major interference," Wharton said.

FCC rules prohibit broadcasters from disclosing whether they're participating and selling airwaves.

In Philadelphia, the nation's fourth-largest TV market, 29 stations - virtually the entire sector, from the highest-valued CBS3 to the lowest-valued WHYY-TV - are listed as potentially participating in the auction with the FCC.

Nationally, 62 telecom companies, including Philadelphia-based Comcast Corp., have qualified as buyers of the newly available TV spectrum.

Through the first round, which ended Aug. 30, the airwaves auction has raised $23 billion nationwide, short of the target of $88 billion. The auction's next round begins next week. The process could conclude this year.

Most observers expect the $23 billion to climb in subsequent rounds. But theoretically it could fall, based on the auction's complex structure.

Comcast Corp. owns TV spectrum through its NBCUniversal subsidiary. It would cash out of some of its NBC and Telemundo airwaves but also acquire new wireless licenses in Philadelphia and other cities for a new wireless service offered through its cable division.

Comcast CEO Brian Roberts and other Comcast executives have said the company could launch a wireless service.

Comcast spokesman John Demming said Wednesday that the FCC rules also forbid the cable giant from talking about the auction.

Moffett said the "the assumption is that they will get into the wireless business." And he said "if they really want to be in the wireless business, they would want to own their own network."

Moffett estimated that AT&T and Verizon could each spend $5 billion on spectrum, though generally those carriers would not be as grabby for the spectrum as they were in the previous auction in 2014 because of more debt on their balance sheets.

Congress said the FCC has to set aside $1.75 billion to help TV stations finance new equipment to broadcast signals in the rejiggered TV spectrum after the auction.

bfernandez@phillynews.com

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