Spectrum Auction and Journalism

A Once-in-a-Lifetime Chance to Strengthen Our Communities

In 2016, the Federal Communications Commission began a long-awaited auction that will involve a major redistribution of the public airwaves. The FCC is urging broadcasters to give up their channels or move elsewhere on the dial to free up more bandwidth for mobile data. In return, broadcasters will get most of the proceeds from selling new licenses to wireless companies.

The auction will include noncommercial TV licenses held by state and local governments and both public and private universities. Some of these public-broadcasting licenses may be worth hundreds of millions of dollars, depending on stations’ locations and the size of the populations they reach.

The auction is estimated to result in as much as $50 billion going to broadcasters. Of that total, as much as $6 billion is likely to go to the owners of public television stations.

The future of these public stations is uncertain. Many could go off the air, which would mean the loss of local programming and news coverage. And all of this is happening at a time of crisis in journalism.

Our communities are harmed when there are fewer news outlets that cover important local issues and provide a voice for their audiences. There’s evidence that civic participation drops, corruption increases and lawmakers bring in less funding for communities when local news disappears.

That’s why the spectrum auction is so important.

Instead of simply putting these auction revenues into state treasuries or university endowments, the funds should be used to establish long-term support for responsive local journalism, community media and other projects that serve the public’s information needs. This could take the form of locally focused investigative newsrooms, new tools to help the public sift through data, or robust community-engagement projects.

That’s where you come in: This kind of investment in local journalism will happen only if the public and newsrooms come together to fight for it.

Scroll below for details on the auction, which stations are participating, and why we think auction proceeds should be used to improve coverage of our communities.

How the auction works

The FCC is buying back TV stations’ broadcast licenses and selling them to provide more bandwidth for mobile data.

The auction has two distinct parts. In the first phase (the “reverse” auction), the FCC will buy up spectrum from commercial and noncommercial broadcasters to open up valuable swaths of the airwaves. In the second part (the “forward” auction), the agency will auction off the freed-up spectrum to wireless companies or other commercial bidders.

Broadcasters have three choices. They can: 1) sell their licenses and stop broadcasting; 2) sell their licenses but maintain a signal through channel-sharing; or 3) move “down the dial” from UHF (“ultra high frequency”) to VHF (“very high frequency”).

Even broadcasters that don’t participate in the auction might be affected because the FCC reserves the right to move their signals to different channels, a process called “repacking.” Both commercial and noncommercial TV licenses are involved in this process. (Check out this video from the Corporation for Public Broadcasting for more on how the auction works.)

The FCC has published a list of the maximum opening-bid prices for every station in the country that could be part of the auction, ranging from $900 million for WCBS-TV in New York to $1.2 million for a tiny station in Glendive, Montana. This is the most each station could get, though it will almost certainly be less because the prices go down in each round of the auction.

The FCC so far has conducted three stages of the auction, but as of yet the prices sought by the broadcasters and the bids made by the wireless companies haven’t matched up. In the current stage of the auction, the FCC is attempting to clear 84 MHz in each television market, the equivalent of channels 38–51 on the dial. If the two prices fail to match yet again, the auction will move into subsequent stages until the wireless companies offer to pay more in the forward auction than the broadcasters accept in the reverse auction. At that point, the auction will close.

Most observers expect the auction to be completed by the end of the year or in early 2017, though it will take much longer for the FCC to relocate stations and distribute payments.

Investing in local communities

While it’s going on, the auction is a bit of a mystery: The rules prevent participants from talking about it or revealing their bidding strategies. Stations aren’t required to say whether they’re participating — but they’re not prohibited from doing so, either.

Through our research, we discovered that at least 54 public TV stations plan on taking part. These stations are concentrated in 18 states and the District of Columbia.

Some of the most notable and valuable public TV stations entering the auction include:

  • Four public TV licenses owned by the state of New Jersey — which together could be worth as much as $2.3 billion
  • Three Los Angeles-area public TV stations — KVCR-TV, KOCE-TV and KLCS-TV — that together could be worth more than $1.5 billion
  • WYCC-TV on the South Side of Chicago, owned by local community colleges, which could be worth as much as $473 million
  • WHUT-TV, licensed to Howard University in Washington, D.C., the country’s only Black-owned public broadcasting station — which could be worth as much as $460 million

Click here to learn more about Free Press’ findings.

Participating in the auction doesn’t necessarily mean stations will go off the air — or that they will get anything close to their maximum opening-bid prices. But they could still easily bring in hundreds of millions of dollars.

Investing in local journalism

Public TV license holders stand to make a huge amount of money from the auction, but most haven’t yet committed to putting that money back into journalism or community programming. Instead of using these revenues to fill short-term holes in state budgets or university endowments, those funds could be used to fill important gaps in local news coverage and information needs.

We’re exploring at least two possibilities for how the auction could help serve community needs: a) creating a permanent public fund dedicated to supporting serious journalism at the state or local level and b) starting new digital newsrooms dedicated to in-depth reporting at the local level.

A permanent public fund would create ongoing support for local journalism and other community-driven projects. With a significant endowment, such a fund could help launch and sustain:

  • Fund hyperlocal startups serving communities of color and others who are underrepresented in the mainstream media.
  • Strengthen community-engagement efforts and give people opportunities to identify and frame the most important issues.
  • Finance in-depth investigative reporting projects on these issues.
  • Support newsgathering at public and community-based radio and TV stations.
  • Encourage collaboration across platforms and outlets.
  • Build tools that could make data and public information more accessible.
  • Get people trained as community-based reporters and provide equipment, spaces and training.
  • Promote diversity in existing newsrooms.
  • Launch projects that allow people to tell their own stories.
  • Increase funding for local municipalities, schools, libraries and other institutions to create innovative information projects.

The public must help set the priorities for such a fund, with an open process for funding designed to ensure editorial independence and inclusion of historically marginalized communities. We’d also assemble boards consisting of civic and cultural leaders, along with journalism professionals, academics and technologists who represent a state or city’s racial, ethnic, geographic and gender diversity.

Creating a new public fund won’t be possible everywhere. In places like universities, or even at public TV stations that continue to operate after the auction, we see an opportunity to invest in cutting-edge digital newsrooms focused on local issues and underserved communities.

It took $50 million to launch the Pulitzer Prize-winning investigative news operation at ProPublica. Now imagine what a similar level of funding — which would be just a portion of the money the auction generates — could do for local journalism in cities like Chicago, Flint, Milwaukee, Tampa and Washington, D.C.

Each community is different, and so are its information needs. We hope that by working with residents and partnering with local allies, we can implement countless other ideas that could support strong local journalism and greater community involvement for decades to come.

People + Policy

= Positive Change for the Public Good

people + policy = Positive Change for the Public Good