Telecommunications: Information on Low Power Television, FCC's Spectrum Incentive Auction, and Unlicensed Spectrum Use
Released: 2016-12-05T00:00:00

Letter

Background

LPTV stations, as indicated by their name, operate at lower power levels and transmit over smaller areas than full-power television stations. FCC established a licensing process for LPTV stations in 1982 to add to programming diversity and provide opportunities for locally oriented television service in small communities. LPTV stations may originate programming and, according to FCC, have created opportunities for new entry into television broadcasting, provided a means of local self- expression, and permitted fuller use of the broadcast spectrum. Translator stations retransmit programming from another station—such as a major network (ABC, CBS, FOX, or NBC)—to audiences unable to receive signals directly, usually because of distance or terrain barriers, such as mountains, that limit the signal’s ability to travel long distances. FCC rules prohibit translator stations from originating any programming. As shown in figure 1, some translator stations are part of a “daisy chain” in which multiple translator stations relay signals from one translator station to another, allowing the originating station’s signal to be received a few hundred miles away despite distance or other terrain obstacles.

LPTV and translator service is secondary, meaning these stations may not cause interference to, and must accept interference from, primary services including primary television stations, which are full-power and Class A television stations. When interference with a full-power station cannot be remedied by adjusting an antenna or other technological methods, LPTV and translator stations must vacate the channel either by requesting FCC’s permission to move to another channel or by requesting permission to turn off their broadcast signal while searching for another channel. LPTV stations generally do not have “must-carry” rights—that is, cable and satellite providers are generally not required to carry signals from LPTV stations, but cable and satellite providers may agree to do so.

The 2012 act authorized FCC to conduct an incentive auction for broadcast television spectrum. This auction comprises two separate but interdependent auctions—a “reverse auction” to determine the amount of compensation that each broadcast television licensee would accept in return for voluntarily relinquishing some or all its spectrum rights; and a “forward auction” to determine the price companies are willing to pay for the relinquished spectrum. The spectrum being auctioned is in the UHF range, which currently consists of channels 14 through 51, except for channel 37. According to FCC, the spectrum being auctioned has excellent propagation characteristics that allow signals to cover large geographic areas and penetrate walls and other structures. As shown in figure 2, at the time of this report, the incentive auction was ongoing and FCC expected it to conclude at the earliest in late 2016.

After the auction concludes, FCC reported it intends to reorganize the television broadcast band on a smaller range of channels to free up a portion of the spectrum; FCC refers to this reorganization as “repacking.” Relocating the remaining stations on lower channels allows for new, flexible-use spectrum licenses suitable for providing mobile broadband services. In April 2016, FCC announced an initial spectrum clearing target—the amount of spectrum FCC aimed to clear and repurpose in the auction and repack—of 126 MHz. In November 2016, after the first and second stages of the forward auction concluded without meeting the reserve price, FCC announced a new clearing target of 108 MHz, requiring television stations to use channels 2 through 32. As shown in figure 3, the number of channels available for both television stations and spectrum available for mobile broadband services varies depending on the clearing target.

The 2012 act authorized FCC to repack the remaining eligible stations and directed FCC to make all reasonable efforts to preserve the coverage area and population served of each eligible broadcast television licensee when making channel reassignments or reallocations following the incentive auction. In June 2014, FCC released the incentive auction report and order adopting rules to implement the incentive auction and subsequent repacking process. In the report and order, FCC stated that, as required by Congress in the 2012 act, FCC will preserve or protect the coverage area and population served by eligible broadcast television licensees. Further, FCC concluded that protecting other categories of facilities, including LPTV and translator stations, which are—secondary in nature and not entitled to protection from primary services under FCC’s current rule—would unduly constrain FCC’s flexibility in the repacking process and undermine the likelihood of meeting FCC’s objectives for the incentive auction. FCC recognized the decision not to extend repacking protection and not to guarantee channels for LPTV and translator stations will result in some viewers losing service, may negatively affect the investments displaced LPTV and translator licensees have made in their existing facilities, and may cause displaced licensees that choose to move to a new channel to incur the cost of doing so. Although FCC does not know the number of affected LPTV and translator stations, FCC concluded that these concerns are outweighed by the detrimental impact that protecting LPTV and translator stations would have on the repacking process and on the success of the incentive auction. In two separate cases in December 2015, LPTV licensees and an individual party brought suit against FCC over the incentive auction and its potential impact, claiming, among other things, that FCC denied protections to LPTV stations in the auction and repacking process and that FCC’s actions violated the 2012 act. In 2016, the U.S. Court of Appeals for the District of Columbia Circuit dismissed the petition for review in one case and sustained FCC’s orders in the other case. At the time of our review a separate, late-filed lawsuit raising similar concerns was ongoing.

In addition to adopting rules related to the incentive auction and subsequent repacking process, the incentive auction report and order announced a number of actions intended to make a significant amount of spectrum available for unlicensed use, including permitting unlicensed operations (1) on channel 37 in locations sufficiently removed from incumbent users to protect from harmful interference and (2) in the spectrum guard bands. Additionally, FCC indicated in the incentive auction report and order that it anticipated there would be at least one channel in all areas throughout the country not assigned to a television station that could be used by unlicensed devices. In June 2015, FCC issued an NPRM to this effect, proposing to preserve at least one vacant channel in the UHF television band throughout the country. The NPRM proposes that the channel preserved would be a UHF channel above channel 20, and the specific vacant channel preserved could vary depending on the particular area. This proposal, known as the vacant channel proposal, would require LPTV and translator stations displaced by the repacking process to demonstrate that any new or modified facilities needed for a station to relocate to another channel would not eliminate the last remaining vacant channel in an area. FCC tentatively concluded that the vacant channel proposal would ensure the public continues to have access to the significant benefits provided by unlicensed devices and wireless microphones across the country. According to FCC officials at the time of our review, it had not taken further action on the vacant channel NPRM and those matters were still under consideration.

Unlicensed devices that operate in the television spectrum band are sometimes referred to as white space devices because they operate in spectrum “white spaces”—buffer zones FCC established to mitigate unwanted interference between adjacent stations. According to FCC, unlicensed devices are an important part of the nation’s communications capabilities, serve to augment the operations of licensed services, and meet the needs of a wide range of wireless applications including Wi-Fi, Bluetooth, baby monitors, and garage door openers. The Consumer Electronics Association reported in 2014 that devices using unlicensed spectrum generate approximately $62 billion annually in retail-level sales and that further estimated growth in the market for devices that rely on unlicensed spectrum was “extremely strong.”

LPTV and Translator Stations Provide Programming and Information That Might Not Be Available to Over-the- Air Viewers after the Auction

LPTV and Translator Stations Are Diverse in Their Programming and Owned by Various Types of Entities

Through analysis of FCC data, our survey of LPTV and translator station representatives, and meetings with stakeholders as discussed below, we obtained information on LPTV and translator stations, including (1) the number of such stations and their communities of license, (2) types of programming and hours of broadcasting, and (3) ownership. Information obtained through our survey is non-generalizable.

Number of Stations and Communities of License

According to our analysis of FCC data, there were 2,063 LPTV stations and 3,660 translator stations in the U.S. and its territories as of May 25, 2016. LPTV stations’ communities of license are shown in figure 4. According to one broadcast industry association we interviewed, LPTV stations serve a wide range of diverse audiences, including those in both rural counties with limited access to full-power stations and in large urban areas.

According to our analysis of FCC data, translator stations’ communities of license are shown in figure 5. Translator stations tend to be concentrated in both rural and mountainous areas where they serve communities that cannot receive signals from full-power stations because they are too far away or because terrain blocks the signals.

According to FCC officials, pursuant to the First Amendment, FCC does not generally monitor broadcast stations’ content and programming choices and because the few public service obligations LPTV stations have do not pertain to programming provided. Therefore FCC does not collect information on the programming provided by LPTV stations or their hours of broadcasting, and we did not identify other sources of such data. In our non-generalizable survey of LPTV and translator station representatives, respondents representing 535 of the 2,063 LPTV stations in the U.S. and its territories provided information about the types of programming broadcast by the stations they represent (see fig. 6). Survey respondents indicated that most of these stations broadcast locally produced programming, and almost half of the stations represented by survey respondents broadcast at least 18 hours per day and an average of 3 hours per week of locally produced content, two factors similar to requirements for Class A status under the Community Broadcaster Protection Act of 1999.

The locally produced programming broadcast by LPTV stations may be diverse and is broadcast in a variety of languages. Through our survey we identified examples of such content, including: programming in languages such as Bosnian, Hmong, Italian, Polish, Spanish, and various Native American languages; local news, weather, and traffic; local information, including community events, political debates, and volunteer opportunities; local recreational and tourism information such as skiing, fishing, and hunting reports; public health programming; arts and special interest programming such as art and cooking shows; children’s programming.

Additionally, survey respondents provided information about programming broadcast by the stations they represent that is not locally produced. As shown in figure 7, the most common type of non-locally produced programming broadcast by LPTV stations represented by survey respondents is general entertainment.

Table 1 provides examples of these different types of programming that is not locally produced. These examples are from our survey, comments to FCC, and interviews.

Moreover, LPTV stations that broadcast digitally may simultaneously transmit multiple signals and therefore can broadcast different content on multiple sub-channels. For example, representatives of a station ownership group told us about programming they broadcast on digital sub-channels in the Los Angeles area. On one digital sub-channel, they broadcast programming imported from Central America that is the primary news source for many of the about 2 million immigrants from Central America living in the area, according to these representatives. On another digital sub-channel, they broadcast programming imported from Cambodia, which is the only Cambodian station in the U.S. and reaches between 50,000 and 70,000 Cambodian speakers in the area, according to these representatives.

Ownership

FCC collects information biennially on racial and ethnic minority and female broadcast ownership for certain commercial stations. FCC’s reports based on this data collection do not present data on the number of stations owned by different types of entities such as for-profit, not-for- profit, and governmental. Further, while full-power, Class A, and LPTV stations are required to provide this information, FCC officials told us that translator stations are not required to submit this information and that, according to the most recent report based on these filings, about one third of LPTV stations did not file the required reports.

Our survey collected information on the types of entities that own the LPTV and translator stations represented by respondents. As shown in figure 8, most of the 535 LPTV stations represented by survey respondents are owned by for-profit entities, while more than a third of the 1,515 translator stations represented by survey respondents are owned by governmental entities. Ownership of translator stations tends to vary depending on factors such as the direct market size of full-power stations and geography, according to representatives we interviewed from a broadcast industry association. For example, in New Mexico and Oregon, where the direct market for full-power stations is less populous, full-power stations may own and operate translator stations to extend the reach of their programming. In mountainous areas where geography may limit the reach of full-power stations, translator stations tend to be locally owned by governmental entities or other community organizations, according to a broadcast industry association we interviewed.

Ownership type and structure may affect stations’ vulnerability in the auction even in areas where spectrum is available following the auction, according to various stakeholders as discussed below.

Government- and community-owned stations typically rely on municipal budgets and tax revenues to operate, and in some cases the community served would have to raise taxes or dues to obtain the capital necessary to relocate, according to representatives from two broadcast industry associations we interviewed and three survey respondents.

Stations owned by for-profit, not-for-profit, and educational entities may not be able to afford the capital costs required to relocate, particularly when the entity operates on a small budget, according to two broadcast industry associations we interviewed and two survey respondents. For example, while some translator stations may be owned by station ownership groups that own a portfolio of stations— including full-power stations, Class A stations, or both—of the 115 station representatives who completed our survey, more than two- thirds (81) represent 10 stations or fewer, and 33 respondents represent a single station. Further, according to a station ownership group we interviewed securing financing to fund relocation costs is difficult because investors are unwilling to invest in LPTV and translator stations because of their uncertain future.

Some station owners, regardless of the type of ownership entity, use revenue from stations in more populated areas to supplement funding for the operation of stations in less populated areas. For example, station representatives who operate three LPTV stations serving Native American communities told us that the stations serving less populated areas would not be able to operate without supplemental revenue from the stations serving more populated areas. According to these representatives, these stations provide diverse programming such as locally produced Native American cultural programming, educational programming, information on tribal affairs, and programming in multiple Native American languages.

The Incentive Auction Could Affect Viewers’ Ability to Receive LPTV and Translator Stations’ Programming and Televised Emergency Information

We found LPTV and translator station viewers may lose access to programming or emergency alert information through several possible ways, including the following:

Alternatives to broadcast programming are cost-prohibitive or unavailable: Many LPTV and translator station viewers are economically or geographically disadvantaged and may not be able to afford other options for accessing programming such as for satellite television or broadband Internet, according to two broadcast industry associations we interviewed and six survey respondents, among others. For example, one survey respondent, a county treasurer/recorder in a rural area, described the situation for viewers of the county’s translator stations. The county charges each household $30 per year for television service. The survey respondent said that there are many county residents who are elderly, on fixed incomes, or otherwise low-income and cannot afford to pay a higher monthly television subscription fee, such as satellite service. Further, some viewers live in areas where paid television service or broadband service, or both are unavailable, according to one broadcast industry association we interviewed, a station ownership group, and one survey respondent.

Niche programming: Viewers of locally produced programming and niche programming, such as the programming described above, may lose access to this programming, and similar programming may not be available through the remaining over-the-air broadcast channels according to three broadcast industry associations and a station ownership group we interviewed. For example, if an LPTV station broadcasting non-English-language programming in a city is displaced in the incentive auction and cannot find an available channel in the repack, its viewers may have no other options for similar programming. Moreover, LPTV stations that provide niche programming to a particular audience in a particular area could be forced out of business following the incentive auction and repack even if they are able to find available spectrum in the repack. For example, a non-English language channel may exist to serve a segment of the population that resides in a small pocket of an urban area. If displaced, that channel may be unable to relocate to a replacement channel that would reach its primary viewers, as shown in figure 9. Without access to its primary viewers, the station may not be able to raise the funds necessary to continue operation.

Televised emergency alerts: Some viewers in geographically remote areas receive broadcast television signals only from a station or stations that are not protected in the incentive auction and repack, meaning the station might be unable to relocate and thus cease broadcasting. Viewers in these areas may no longer have access to televised emergency alerts. Of the 2,050 LPTV and translator stations represented by survey respondents, more than 10 percent (211) serve areas that receive no service from full-power or Class A stations, according to survey respondents. Moreover, of the 1,515 translator stations represented by survey respondents, 433 rebroadcast signals received from another translator station and 212 send signals to another translator station. This interconnectedness among translator stations could compound these stations’ vulnerability in the auction, according to representatives of a broadcast industry association that represents translator stations. Although it is possible for LPTV or translator stations to serve as the only source of televised emergency alerts, FCC considered whether such stations should have special priority in the repacking process and declined to adopt any such measures. In particular, in a 2012 NPRM FCC sought comment on whether the public interest would be served by establishing a set of selection priorities to choose among applications of displaced LPTV and translator stations and on the types of selection priorities to adopt. In the incentive auction report and order, FCC declined to adopt the particular selection priorities suggested by commenters in the NPRM, including providing priority for stations that are primary Emergency Alert System providers.

As noted previously, FCC has acknowledged that the incentive auction will potentially displace some LPTV and translator stations. FCC officials told us they have not systematically analyzed the potential displacement impact on LPTV or translator stations because of Congress’s determination not to include these stations in the auction or protect them in the repacking process. As discussed below, FCC has taken some actions to try to mitigate the auction’s effects on these stations.

Selected Stakeholders View FCC’s Actions as Having Limited Usefulness and Have Proposed Additional Actions to Mitigate the Auction’s Effects

Selected Stakeholders View FCC’s Actions as Helpful in Some Circumstances but Insufficient

According to FCC officials, FCC’s actions to mitigate the effects of the incentive auction include: (1) channel sharing, (2) the digital transition deadline, (3) FCC’s optimization software, and (4) cross-border coordination. While broadcast industry associations generally expressed support for these measures in comments to FCC, some representatives of these groups told us and stated in comments to FCC that the actions will not do much to mitigate the effects of the incentive auction on LPTV and translator stations. Moreover, we asked the 115 representatives of 535 LPTV and 1,515 translator stations who responded to our survey to rate the usefulness of these four measures, and, in all but one case, the number of both LPTV and translator stations represented by respondents was greater for those who rated the action as not useful. Furthermore, those who rated these measures as useful often did so with caveats.

Channel Sharing

In the LPTV and translator report and order, FCC announced that it will allow channel sharing among LPTV and translator stations and proposed allowing channel sharing between LPTV and translator stations and full- power and Class A stations. Stations that enter into such agreements may divide the capacity of the shared channel however they would like, as long as each station retains spectrum usage rights sufficient to transmit at least one standard definition programming stream at all times, but will continue to be licensed separately and will separately be subject to FCC’s obligations, rules, and policies. According to FCC, these measures have the potential to be beneficial to LPTV and translator stations, and some broadcast industry associations expressed support of these measures in comments to FCC. However, all of the broadcast industry associations with whom we discussed the issue stated that allowing LPTV and translator stations to enter into channel-sharing agreements will not be helpful in a meaningful way. For example, a representative from one broadcast industry association told us that channel sharing would likely require stations to degrade their signal, which may inhibit multicasting and the use of high-definition signals, and another broadcast industry association told us that stations will use channel sharing only as a last resort. Additionally, as shown in table 2 below, survey respondents representing more stations rated channel sharing as not useful, than useful.

In the LPTV and translator report and order, FCC announced it will use its incentive auction and repacking optimization software to identify channels that will be available for displaced stations. FCC plans to publish a list of available channels 60 days prior to the beginning of the LPTV and translator displacement window, and displaced stations will be able to use this information when applying for replacement channels. While FCC stated in the LPTV and translator report and order that this proposal garnered considerable support from broadcast industry associations, representatives from the four broadcast industry associations that mentioned this measure to us said that it will be minimally helpful. Specifically, one broadcast industry association told us that it will provide almost no help to LPTV stations, and another stated that the measure is hollow and will have limited effect, if any. Additionally, as shown in table 3 below, survey respondents representing more stations rated this measure as not useful, than rated it as useful.

In the LPTV and translator report and order, FCC extended the deadline by which analog LPTV and translator stations must complete the transition to digital so that stations would not have to make significant capital investments to meet the digital transition deadline, only to face possible displacement in the auction and repack process. According to FCC, the September 2015 deadline had been established in anticipation of the auction being conducted in 2014. While FCC cited broad support from the LPTV and translator industry for this measure, two broadcast industry associations stated in comments to FCC that this action was more a common sense policy change than an action to mitigate the effects of the auction. These commenters said it was only fair for FCC to extend the date given the cost associated with transitioning to digital and then potentially relocating after the auction. As shown in table 4 below, survey respondents representing more stations rated extending the digital transition deadline as not useful, than useful.

In the LPTV and translator report and order, FCC addressed commenters’ suggestions that FCC develop a streamlined approach to coordinating with foreign governments on the interference and application approval process to address situations where stations’ signals may cross an international border, such as into Canada or Mexico. FCC stated that the cross-border coordination process is continual and that FCC has used its existing processes to keep Canada and Mexico fully informed on the incentive auction coordination issues. FCC further stated that it intends to make efforts to streamline the cross-border coordination processes so that it will not delay the post-auction displacement application process for LPTV and translator stations. As shown in table 5 below, a greater portion of LPTV stations were represented by survey respondents that rated this measure as useful than not useful, whereas the opposite is true for translator stations. However, regarding cross-border coordination, survey respondents provided similar responses regardless of the rating they provided.

Stakeholders Suggested a Variety of Actions to Help Mitigate the Potential Impact of the Auction

In addition to the measures discussed above, the broadcast industry associations and station ownership groups we interviewed and the station representatives who responded to our survey identified other actions they believe FCC or Congress could take that could help mitigate the effects of the incentive auction on LPTV and translator stations. The proposals that arose the most frequently in the interviews and survey were: (1) reconsidering various aspects of the auction, (2) providing funding for relocation costs incurred by LPTV and translator stations displaced in the auction, (3) allowing LPTV and translator stations to operate with alternative technical standards, and (4) providing LPTV and translator stations an opportunity to obtain primary interference protection status, which would protect these stations from future displacement by primary services.

Reconsider Various Aspects of the Auction

The suggestions that arose most frequently related to FCC reconsidering various aspects of the incentive auction. For example, 15 survey respondents suggested that FCC protect LPTV and translator stations in the incentive auction and repack; 12 survey respondents suggested that FCC or Congress provide compensation for lost spectrum rights to displaced LPTV and translator stations; 7 survey respondents suggested that FCC provide protection in the auction and repack for certain types of stations such as rural translator stations, tribally owned stations, and stations broadcasting locally produced content; 6 survey respondents suggested that FCC or Congress cancel the auction; and 5 survey respondents suggested that FCC provide LPTV and translator stations more time to move channels. Regarding these and similar suggestions raised in the incentive auction proceeding, FCC stated in the LPTV and translator report and order that the proposed measures were fully considered in the incentive auction rulemaking proceeding and subsequent orders and FCC declined to revisit them.

Provide Funding for Relocation Expenses

The second most frequent suggestion related to FCC or Congress providing funding for relocation costs incurred by LPTV and translator stations that are displaced in the auction, either through a grant program or through reimbursement of expenses. While FCC has studied the costs associated with relocating eligible full-power and Class A stations that are reassigned to new channels during the repack process, FCC officials told us that because Congress did not make LPTV or translator stations eligible to be reimbursed for certain relocation costs, the officials have not studied the costs associated with relocating LPTV and translator stations. A broadcast industry association we interviewed indicated that the costs for relocating LPTV and translator stations vary widely depending on a number of factors such as the distance of the move; whether a new tower will be required; and the availability of engineers, tower crews, and equipment. Of the 83 survey respondents that represent LPTV stations, 28 respondents reported estimated relocation costs ranging from $25,000 to over $600,000 per station. Of the 50 survey respondents that represent translator stations, 15 respondents reported estimated relocation costs for their stations ranging from approximately $8,500 to approximately $37,500, with an additional $100,000 per site if microwave equipment were required. FCC addressed similar suggestions in the LPTV and translator report and order and in previous orders related to the incentive auction and stated that the decision whether to authorize such funding is Congress’s prerogative and that the 2012 act limits reimbursement to full- power and Class A stations.

Permit Use of Alternative Technical Standards

Half of the broadcast industry associations we interviewed, all of the station ownership groups we interviewed, and 13 survey respondents proposed various measures by which FCC would allow LPTV and translator stations to operate with different technical standards or network architectures. Proposals include enabling broadcasters to seek innovative ways to use their spectrum and adopting Advanced Television Systems Committee (ATSC) 3.0. ATSC 3.0 is an alternative technical standard for digital broadcast television that, according to proponents, has the potential to enhance the viewing experience, provide for more robust signaling, expand diverse programming opportunities, enhance emergency alert capabilities, and provide for new service offerings. Additionally, some broadcast industry association representatives we interviewed stated that timely adoption of ATSC 3.0 or other alternative technical standards for digital broadcast television would enable many LPTV and translator stations to survive the auction because stations would be more efficient in their use of spectrum, freeing more spectrum for broadcast use in the repack. In the LPTV and translator report and order, FCC stated that consideration of alternative technical standards, including ATSC 3.0, is outside of the scope of the incentive auction proceeding and is better left for future proceedings. In April 2016, several broadcast industry stakeholders filed a joint petition for rulemaking asking FCC to amend its rules to allow broadcasters to use ATSC 3.0, and later that month FCC issued a public notice seeking comment on the petition, with comments due in June 2016. According to FCC officials, these comments are under consideration and FCC could decide to issue an NPRM; however, as of September 2016, FCC has not announced a timeline for doing so.

Provide Opportunity to Obtain Primary Interference Protection Status

Two broadcast industry associations and a station ownership group we interviewed as well as some survey respondents suggested that FCC provide an opportunity for LPTV and/or translator stations to obtain primary interference protection status, such as Class A status or some other designation, to avoid future displacement by primary users. Some proponents stated that such a measure would provide more certainty for the industry going forward, which in turn would enable investment in the industry. In the LPTV and translator report and order, FCC declined all proposals that would allow LPTV and/or translator stations to obtain primary interference protection status before the completion of the post- auction transition period, but stated that FCC may consider at a later date whether to allow LPTV and/or translator stations to obtain primary status after the completion of this period.

Selected Stakeholders Expressed Varying Views on Outcomes of Preserving a Vacant Television Channel

Through our interviews with selected stakeholders—including six broadcast industry associations, three station ownership groups, two technology companies, a technology industry association, and a public interest group—and analyzing comments filed with FCC, we identified four primary expected outcomes of preserving a vacant television channel: (1) loss of existing broadcast service, (2) development of new technologies and innovation, (3) improvement of Wi-Fi Internet, and (4) improvement of rural broadband service. FCC officials told us these outcomes are the main outcomes stakeholders discuss in comments submitted to FCC. The broadcast industry associations and station ownership groups generally opposed the proposal, while the technology companies, the technology industry association, and the public interest group were proponents of the proposal. As discussed below, stakeholders expressed varying views about the expected outcomes.

Loss of Existing Broadcast Service

Representatives from all the broadcast industry associations told us that preserving a vacant channel will result in a loss of existing broadcast television service for viewers. For example, a representative from one broadcast industry association told us the vacant channel proposal will force existing LPTV and translator stations off the air because there will be one less channel where a displaced LPTV or translator station can relocate and that many rural and underserved communities will likely lose access to the broadcast stations on which they rely. Additionally, representatives of the three station ownership groups we interviewed also expressed concern that the vacant channel proposal would result in a loss of existing broadcast service. A representative from one of these groups told us the vacant channel proposal will exacerbate the challenges faced by LPTV stations by taking at least one more channel and preventing them from relocating there following a stations displacement after the incentive auction.

In the vacant channel NPRM, FCC stated a tentative conclusion that the proposal, if adopted, would not be a significant burden in terms of the availability of channels for future use for broadcasters, including LPTV and translator stations. The NPRM further stated that the impact will be limited because multiple vacant channels will still exist in all or most areas after the channel repack. FCC officials told us they have not conducted a systematic analysis on the expected effects of the vacant channel proposal on LPTV and translator stations, but noted they proposed preserving a vacant channel because of the overall potential public- interest benefits expected from doing so. The officials noted that FCC used available information including comments filed with FCC to inform the proposal and that they sought additional comment on the proposals and tentative conclusions contained in the NPRM. The officials told us that the National Association of Broadcasters (NAB) and Google had each submitted filings to FCC that included analysis on the expected loss of service effects of preserving a vacant channel and that the studies reached very different conclusions. According to NAB’s analysis, the number of LPTV and translator stations that would go off the air if the vacant channel proposal were adopted ranged from 347 stations to 433 stations, depending on the amount of spectrum that FCC ultimately clears in the auction. The analysis concluded that FCC’s proposal would have a devastating impact on LPTV and translator stations and the viewers who rely on those stations to receive over-the-air signals. On the other hand, Google’s analysis found that FCC’s vacant channel proposal would have minimal impact on LPTV and translator stations. Google analyzed five markets selected for a variety of reasons including, to represent areas with large numbers of LPTV and translator stations, mountainous terrain, large rural areas, and urban areas to identify which LPTV and translator stations, if any, would be unable to continue operations as a result of FCC’s proposed rule. Google concluded that for the typical viewer, in the majority of scenarios, no LPTV or translator station will be affected. The analysis also indicated that in 72 percent of the nearly 400 counties included in the analysis, not a single station would be affected, and that even in the specific counties likely to be the most affected, the preservation of a vacant channel will have only a small impact. Both NAB and Google have submitted comments to FCC critiquing the other’s conclusions.

Development of New Technologies and Innovation

Proponents of FCC’s vacant channel proposal whom we interviewed and who commented on the proposal generally expect it will contribute to innovation and the development of new technologies. In our analysis of comments filed with FCC by proponents of the vacant channel proposal, at least five groups expressed the idea that preserving vacant channels would help the development of new technologies. For example, one of these commenters noted that ensuring unlicensed devices have nationwide access to spectrum in the reallocated television spectrum band will promote investment and innovation in these technologies. In comments filed by another proponent of the proposal, the group stated reserving at least one vacant television channel in every market nationwide for public use on an unlicensed basis is essential to spurring investment and achieving the enormous public interest benefits of developing new personal portable devices. The commenter went on to state that ensuring a substantial amount of unlicensed spectrum on a nationwide basis is critical for developing markets for new, innovative, and affordable chips, devices, applications, and services.

Three of the four proponents of the proposal to preserve a vacant channel whom we interviewed told us that three channels for unlicensed use are needed to develop new technology and that preserving a vacant television channel would contribute to this needed amount of spectrum. As discussed previously, FCC’s incentive auction report and order announced a number of actions intended to make more spectrum available for unlicensed use, including permitting unlicensed operations on channel 37 (in locations sufficiently removed from incumbent users to protect from harmful interference) and in the spectrum guard bands. Taken together, these measures will provide two of the three channels that, according to proponents of the vacant channel proposal, are needed to develop new technologies. For example, one of the proposal’s proponents told us that unless FCC guarantees there will be three channels available nationwide for unlicensed use, it is very unlikely that new mobile uses will move forward into production. This proponent explained that for companies to invest the money needed to develop new unlicensed technologies and innovate, companies need certainty that sufficient spectrum will be available to invest the tens of millions of dollars needed for development. This proponent also commented that this is particularly important because insufficient spectrum (i.e., less than three channels) in even a single major market, such as Los Angeles, would result in companies not investing money to develop new technologies. This proponent said that FCC’s adopting the vacant channel proposal would help provide this certainty by providing a third channel for nationwide unlicensed use.

Improvement of Wi-Fi Internet

All representatives from the four organizations we interviewed who are proponents of the vacant channel proposal expect the proposal could result in improving Wi-Fi Internet. Specifically, they told us that the proposal could improve Wi-Fi because of the characteristics associated with the UHF television spectrum band. They noted that while traditional Wi-Fi has a relatively limited range and can be blocked by walls or other environmental barriers, Wi-Fi operating in the UHF television spectrum band can travel much farther and penetrate obstacles such as buildings and hills. Representatives of two groups supporting the vacant channel proposal told us that because of the long-range characteristics and ability to travel farther through obstructions, Wi-Fi could be expanded more thoroughly throughout homes and businesses giving people greater connectivity. One of these proponents also added that this could help extend coverage to people who might not have affordable access to the Internet.

Improvement of Rural Broadband Service

Stakeholders we interviewed supporting FCC’s vacant channel proposal generally expect the proposal could result in improved and expanded broadband Internet service in rural areas. Specifically, three of the four proponents of the proposal we interviewed told us that preserving a vacant channel could contribute to improved and expanded broadband in rural areas by allowing people to connect their homes and businesses wirelessly to the Internet. One proponent told us that in rural areas, unlicensed spectrum use allows consumers to connect to the Internet wirelessly from their home or business. They noted that this use of spectrum is currently occurring and that preserving a vacant channel could help lower costs and improve the technology, thus improving and expanding broadband in rural areas.

Agency Comments

We provided a draft of this report to FCC for review and comment. FCC provided technical comments, which we incorporated into the report as appropriate.

We are sending copies of this report to the Chairman of FCC and appropriate congressional committees. In addition, the report is available at no charge on GAO’s website at http://www.gao.gov.

If you or members of your staff have any questions about this report, please contact me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Major contributors to this report are listed in appendix III.

Appendix I: Objectives, Scope, and Methodology

This report focuses on the possible effects of the Federal Communication Commission’s (FCC) spectrum incentive auction on low power television (LPTV) and translator stations and their viewers. Specifically, our objectives were to examine (1) what is known about LPTV and translator stations and how FCC’s spectrum incentive auction might affect viewers’ access to the stations’ services, (2) selected stakeholder views on actions has proposed or taken to mitigate the possible effects of the incentive auction on LPTV and translator stations, and additional stakeholder proposals for doing so, and (3) selected stakeholder views on the expected outcomes of preserving a vacant channel for unlicensed use of the television broadcast spectrum.

To determine what is known about LPTV and translator stations and how FCC’s spectrum incentive auction might affect viewers’ access to these services, we reviewed FCC documents related to the incentive auction, including FCC’s June 2014 incentive auction report and order and FCC’s December 2015 LPTV and translator report and order. We obtained data from FCC’s Consolidated Database System (CDBS) as of May 25, 2016, to determine the number of LPTV and translator stations in the U.S. and its territories along with the communities of license. We determined the data were reliable for our purposes after reviewing FCC user guides and forms for CDBS and interviewing knowledgeable FCC officials regarding data entry and analysis procedures. We also conducted a web-based survey of LPTV and translator stations to obtain information on LPTV station programming, ownership of LPTV and translator stations, and station representatives’ views on actions that FCC has proposed or taken and actions Congress or others could take to mitigate the effects of the incentive auction on LPTV and translator stations. For the web-based survey, we obtained LPTV’s and translator station representatives’ e-mail addresses from CDBS; however, because CDBS did not include e-mail addresses for representatives of all of the 2,063 LPTV and 3,660 translator stations, we sent survey invitations for all LPTV and translator station representatives for whom we could obtain e-mail addresses. We supplemented the e-mail addresses obtained from CDBS with addresses obtained from station representatives and in total identified 330 valid e- mail addresses for LPTV and translator station representatives. Because the e-mail addresses do not represent all LPTV and translator stations, the results of our survey are not generalizable and are only used for descriptive purposes. After preparing draft survey questions and response categories, we spoke with representatives from three broadcast industry associations and a translator station representative chosen for their broad industry perspective and expertise in particular segments of the industry to determine whether selected questions were answerable by station representatives and whether the response categories provided were appropriate, and updated our survey accordingly. We then pre- tested our survey with four representatives of LPTV and/or translator stations—selected to provide for variety in type of station (LPTV and translator), number of stations represented, and geography—to ensure that our survey questions and skip pattern were clear and logical and that respondents could answer the questions without undue burden. In the course of pre-testing our survey, we also obtained information that we present in this report. We administered the survey from June 2016 through August 2016 and received 115 responses. These responses represent 535 of the 2,063 LPTV stations, and 1,515 of the 3,660 translator stations in the U.S. and its territories. In our report, we provide survey results based on the number of respondents to each question. Because not all respondents answered every question of the survey, the total number of respondents may be fewer than 115 for some results. The results of our survey are not generalizable, and we did not verify respondents’ responses. We also interviewed officials from FCC to determine what information they had regarding LPTV and translator stations and how the incentive auction might affect viewers’ access to these services.

To determine stakeholder views on actions FCC has proposed or taken to mitigate the possible effects of the incentive auction on LPTV and translator stations, and additional stakeholder proposals for doing so, we reviewed selected comments and other filings associated with the incentive auction proceeding. We selected the comments for review by performing keyword searches on filings submitted between October 9, 2014, (when FCC sought comment on a number of issues related to LPTV and translator stations, including additional means to mitigate the potential impact of the incentive auction and repacking process on these stations) and April 1, 2016, to allow additional time to include comments filed after end of the formal comment process. We reviewed filings from entities that filed more than one comment, reply to comment, letter, or notice of ex parte in this time period. We also interviewed broadcast industry associations and station ownership groups that own LPTV and/or translator stations, as shown in table 6. We selected stakeholders to represent a range of views from various types of organizations based on our review of comments filed in FCC’s incentive auction proceeding, as well as based on recommendations from other organizations we interviewed. We chose three station ownership groups that own LPTV and/or translator stations and that broadcast a variety of programming types. Through our web-based survey, we also obtained station representatives’ views on actions that FCC has proposed or taken and that Congress or others could take to mitigate the effects of the incentive auction on LPTV and translator stations. In our report, we use “some” when three or more stakeholder sources combined supported a particular idea or statement.

To identify selected stakeholder views on the expected outcomes of preserving a vacant channel for unlicensed use of the television broadcast spectrum, we reviewed FCC’s June 2015 notice of proposed rulemaking where FCC proposes to preserve one vacant channel in the ultra high frequency television band for use by white space devices and wireless microphones, and we reviewed selected comments and other filings association with this proceeding. We selected comments and other filings for review, by performing keyword searches on filings submitted between October 9, 2014, and April 1, 2016, and we reviewed filings from entities that filed more than one comment, reply to comment, letter, or notice of ex parte in this time period. We also interviewed stakeholders, as shown in table 6 above.

We also reviewed relevant statutes and regulations, including the Middle Class Tax Relief and Job Creation Act of 2012, which authorized FCC to conduct the spectrum incentive auction. We searched various web-based databases to identify existing articles, peer-reviewed journals, trade and industry articles, government reports, and conference papers related to these topics. We identified articles from 2010 to 2016 and examined summary-level information that we believed to be germane to our report. It is possible that we may not have identified all of the reports with findings relevant to our objectives.

Appendix II: Survey of Low Power Television and Translator Stations

The questions we asked in our survey of low power television (LPTV) and translator stations are shown below. In this appendix, we include all the survey questions and aggregate results of responses to the closed-ended questions; we do not provide information on responses provided to the open-ended questions. However, all respondents did not have the opportunity to answer each question because of skip patterns. Furthermore, some respondents may have decided not to respond to a particular question. For a more detailed discussion of our survey methodology see appendix I.

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Staff Acknowledgments

In addition to the individual named above, Sally Moino (Assistant Director), Aaron Kaminsky, (Analyst in Charge), David Hooper, John Mingus, Josh Ormond, Rebecca Rygg, Kelly Rubin, Andrew Stavisky, and Michelle Weathers made key contributions to this report.