With several TV stations and groups potentially for sale, a batch of transactions (CD July 19 p9) could provide investors with a better sense of what LIN Media’s assets are worth and boost its share price, CEO Vincent Sadusky said on the company’s Q2 earnings teleconference. “It’s terrific for everyone associated with the industry that we're going to have some competitive valuation marks, hopefully, as some of these transactions are consummated.” Valuations could be higher than in recent years, he said: “Whether we're a buyer or seller is just going to take place on deal by deal basis.” Even if LIN doesn’t buy or sell any station, it will benefit as stations are sold at higher valuations, he said. “If it doesn’t work for us, we're OK with that. That means these assets will be selling for a premium to our public market value, and that’s a very good thing."
Congress should reallocate the 700 MHz D-block to public safety as part of a debt limit agreement next week, said Senate Homeland Security Committee Chairman Joe Lieberman, I-Conn. He spoke Wednesday at a committee hearing on emergency communications, as Congress continued to wrangle over reducing the deficit and raising the debt ceiling. Senate Majority Leader Harry Reid, D-Nev., proposed giving public safety $7 billion and the D-block in a debt proposal earlier this week (CD July 27 p2). The Congressional Budget Office said Wednesday that the Reid plan would cost much less than the Senate Commerce Committee’s proposed Spectrum Act (S-911).
Spectrum legislation to authorize voluntary FCC incentive auctions for broadcast spectrum appears to have become inextricably enmeshed with the debate over raising the debt ceiling. With no clear path in sight for compromise between President Barack Obama and Republicans in Congress, industry and government officials said Tuesday it’s unclear whether the debt reconciliation will emerge as the key lever for getting the commission the auction authority it seeks as part of the National Broadband Plan. Broadcasters said a debt limit amendment unveiled late Monday by Senate Majority Leader Harry Reid, D-Nev., could hurt the industry.
Cutting the number of TV channels in major markets by 42 percent, as the FCC’s plan for spectrum auctions entails, would be a major barrier to the nascent service of broadcasting terrestrial programming to mobile devices, NAB executives said. There was some variation in executives’ assessment of the threat from voluntary incentive auctions the commission may get congressional authority to hold as part of a deal between the White House and Congress on lifting the debt ceiling (CD July 20 p1). The executives of the association, who spoke to reporters Monday in an effort to raise awareness about what they consider to be the shortfalls of the spectrum auction plan, agreed the mobile DTV hurdles would be major. And President Gordon Smith said the commission is withholding from the NAB and legislators a mathematical model that shows how stations’ coverage areas would be impacted by the repacking of TV channels to free up other frequencies to be auctioned for wireless broadband.
Congressional Budget Office estimates of how much the government will raise through a proposed voluntary incentive auction of broadcast spectrum are no better than an educated guess, industry officials said last week. The CBO’s $24.5 billion estimate for revenue from proposed FCC auctions, after the cost of reimbursing broadcasters for their spectrum, has emerged as a key figure in the debate over spectrum legislation and even deficit reduction. But industry officials who closely track auctions say auction results are difficult to predict, especially at a time when the industry is changing.
The $6.5 billion in deficit reduction estimated by the Congressional Budget Office for Senate spectrum legislation (S-911) failed to win over at least two of four Commerce Committee Republicans who voted against the measure in markup. However, a recent statement by Commerce Committee Chairman Jay Rockefeller, D-W.Va., may imply that Sen. Olympia Snowe, R-Maine, is reconsidering her opposition. Meanwhile, lobbyists are debating the accuracy of the CBO estimate Wednesday that S-911 would reduce net direct spending by $6.5 billion from 2012 to 2021 (CD July 21 p1).
S-911, the spectrum act, would reduce net federal direct spending by $6.5 billion from 2012 to 2021, the Congressional Budget Office said late Wednesday. That’s $3.5 billion less than was estimated by Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., who has touted his bill’s deficit reduction benefits. CBO’s calculation is based on the FCC raising $24.5 billion from spectrum auctions and the bill increasing direct government spending by $18 billion. The bill also would increase discretionary spending by $43 million from 2012 to 2016, assuming appropriation of the necessary amounts, CBO said. A debt ceiling deal proposed Tuesday by the Senate so-called “Gang of Six” would direct Rockefeller’s committee to find $11 billion in savings (CD July 20 p1).
LOS ANGELES -- The rising volume of data-rich traffic requires carriers to address capacity issues with technical solutions in the short run and deploying more spectrum in the long run, panelists at the National Association of Regulatory Utility Commissioners summer meeting said. Operators need to continue to deploy more advanced wireless technologies and offload data traffic onto alternate networks like Wi-Fi and femtocells, which have greater capacity due to their much higher frequency reuse, said Peter Rysavy, president of Rysavy Research. The measures aren’t sufficient to meet growing market demand, he said late Tuesday. The only viable long-term solution is to allocate more spectrum, he said.
Spectrum auctions could be a major part of Commerce committees’ savings plans to meet goals set by a deficit reduction plan released Tuesday by the bipartisan “Gang of Six” senators. The proposal, endorsed Tuesday by President Barack Obama, would direct the committees to find $11 billion for deficit reduction within six months, according to an executive summary of the plan. The proposal set up a two-step legislative process, in which there would be immediate cuts totaling $500 billion, followed by a process in which Commerce and other congressional committees would find further savings.
Spectrum is figuring in debt reconciliation talks, as was expected, but with a twist -- an unexpected tie-in to health care spending, industry sources closely tracking budget negotiations said last week. Republicans hope that under an eventual deal with President Barack Obama they will divvy up major budget cuts that have to be made to the chairmen of the various congressional committees, officials said.