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January 21, 2014
Dennis Wharton
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Navigant Study Refutes Claims TV Broadcasters Received Free Spectrum

WASHINGTON -- The argument that broadcast television stations received spectrum licenses "for free" is grossly misleading, said a new study by Navigant Economics Managing Director and Principal Jeffrey Eisenach released today. The study found nearly all TV station owners paid market value for their spectrum licenses through private transactions, and noted other spectrum holders including wireless carriers and satellite television providers DIRECTV and DISH Network received spectrum licenses without compensating the government.

The study found 92% of all full-power television stations as of August 2013 have been bought and sold since receiving their initial licenses from the Federal Communications Commission. The report estimated the cumulative value of transactions involving full-power stations to be over $50 billion, which includes the market value paid for the stations' spectrum licenses.

"Broadcasters can hardly be said to be receiving a 'windfall' from their spectrum licenses just because the checks they wrote to pay for those licenses were made out to private companies, rather than to 'Uncle Sam,'" said the study.

The study also refuted the notion that television broadcasters are unique in receiving spectrum licenses without direct payment to the government. Other current licensees received spectrum rights from the government prior to the FCC's first spectrum auction. In addition, these licensees are not under the same regulations and public service obligations governing broadcast TV stations such as children's programming requirements, indecency standards and ownership restrictions.

"[I]nitial cellular licenses were issued in the 1980s, prior to the auction era, either through lotteries (to new entrants) or simply by designation (to incumbent wireline carriers)," said the study. "Yet no one suggests mobile wireless carriers' rights to these licenses are diluted or impaired because they 'got them for free.' Similarly, direct broadcast satellite licensees received initial licenses prior to the creation of the FCC's auction authority and thus without making direct payments to the government."

Evolution in spectrum policy has given rise to the recognition by policymakers that spectrum licensees have de facto property or property-like rights over their spectrum interests, according to the study. Continuing to recognize television broadcasters have these same property rights will promote efficient spectrum usage, a robust private market-based system to reallocate spectrum, and technological innovation, the report concluded.

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