Polka

The nation’s trade association for independent cable companies wants the FCC to prohibit broadcasters from blacking out TV stations during disasters and local emergencies.

The American Cable Association applauded the FCC’s intervention in the recent retransmission consent dispute between Dish Networks and Lilly Broadcasting, which resulted in the satellite provider losing access to a Caribbean-focused station for viewers in Puerto Rico and the U.S. Virgin Islands.

“The commission should find it intolerable for a broadcaster seeking to leverage higher retransmission consent fees to block viewers in a state of emergency from accessing critical, and potentially life‐saving, information,” wrote ACA president Matthew Polka. “It is no answer in such a situation for the broadcaster to suggest that viewers should switch providers or install antennas in order to access this information.”

ACA members, often small cable companies providing service in rural areas, also face station blackouts during tough contract renegotiation talks at a time when many stations are asking for unprecedented rate increases — sometimes 100% or more — in return for a carriage renewal agreement. Some stations have used whatever leverage they can find to pressure cable operators to agree to their terms, without disclosing to viewers just how much some stations are asking to renew those contracts. Most cable operators have passed those fees on to subscribers, which can easily add $5-7 a month to a cable television bill just for three or four local stations.

Lilly’s decision to blackout its One Caribbean TV channel left English-speaking viewers in Puerto Rico without an important news source. Most broadcast outlets on that island broadcast for the much larger Spanish-speaking population. The station was quickly returned to Dish’s lineup after it became a political issue.

Polka wants to make sure a similar situation does not happen in the future, so he’s asked the FCC to consider adding a requirement to the FCC’s “good faith” rules that govern acceptable behavior during retransmission consent negotiations forbidding stations from pulling their signal anywhere the FCC has activated its Disaster Information Reporting System, and to guarantee those signals will remain accessible for the duration of the event.

“We urge the commission to propose and seek comment on such a rule change as soon as possible in order to avoid consumer harm in future emergencies,” Polka told the FCC.

As Puerto Rico and the U.S. Virgin Islands enter another week mostly in darkness, a TV station owner is accused of putting its financial well-being ahead of storm victims getting access to the latest news and developments after ordering its One Caribbean TV channel off the lineup of Dish Networks in a contract dispute.

Lilly Broadcasting pulled the station off the satellite service over the weekend in a move slammed by Dish as a cynical ploy.

Lilly has “turn[ed] its back on public interest obligations during [a] humanitarian crisis [and is using a] catastrophe to create ‘deal leverage,’” Dish Network said in a statement. “[Lilly] is demanding from Dish and, by extension, its customers unreasonable rate increases higher than the current Dish rate. Lilly has also refused Dish’s offer to match the rates paid by other pay-TV channels.”

Dish called Lilly’s move an attempt to “further blind the citizens of Puerto Rico and the U.S. Virgin Islands at this time, showing an unbelievable lack of compassion” and added it was a “prime example of why Washington needs to stand up for consumers and end local channel blackouts.”

Exactly how many viewers One Caribbean TV still has in either U.S. territory is unknown. Power is almost universally unavailable and many satellite dishes were turned into flying projectiles in hurricane force winds. But the optics of pulling a station delivering frequent hurricane recovery updates off the lineup at such a critical time was seen as bad publicity and Lilly quickly relented after the office of FCC chairman Ajit Pai got involved.

“Chairman Pai’s office was in touch with both Lilly Broadcasting and Dish yesterday (Oct. 1) and expressed its concern about the impact of this dispute on the people of Puerto Rico and the U.S. Virgin Islands,” an FCC spokesman told Multichannel News. ” We are pleased that the parties agreed to restore carriage of One Caribbean Television last night following these phone calls.”

Satellite Business News reported Lilly Broadcasting Chief Operating Officer John Christianson authorized restoring service in the storm areas.

“We have told Dish Network that they can continue to carry One Caribbean Television in Puerto Rico and the [U.S. Virgin Islands], to help those that can still see the networks keep informed as to what is happening in their region.”

Dish Network satellite customers in Providence, R.I. are being offered free over-the-air digital antennas in preparation for another retransmission consent dispute with the area’s local ABC station.

Citadel Communications-owned WLNE-TV (6) is warning its contract to allow its signal to be carried over the satellite service expires Friday, Aug. 18 at 7 pm. With negotiations still ongoing, Dish is offering its Providence subscribers free installation of a free antenna to receive local Providence over the air stations if they also agree to cancel Dish’s local station add-on package (just under $10/month).

“We’ve been actively working to negotiate an agreement that keeps ABC6 available on Dish, but Citadel’s unbending attitude and outrageous demands show that this broadcaster has no intention of coming to a deal,” said Dish executive vice president of marketing, programming and media sales Warren Schlichting.

More and more consumers are amenable to switching back to free over the air reception to combat rising subscription costs, and providers are finding new ways to accommodate their customers, even at the risk of losing add-on fees from canceled local station packages.

Providence, R.I.

With local television station retransmission consent fees rising faster than other cable and satellite programming fees, some providers would prefer to drop local stations but cannot without alienating customers. The biggest impediment to getting customers to switch to over-the-air reception is signal quality.

In some markets, local station reception can vary considerably depending on where the customer watches. Digital reception problems cause pixelation and picture freezes, and correcting these can require regular antenna repositioning or an outdoor antenna, especially in fringe reception areas.

In Providence, several thousand Dish customers have switched back to over the air reception after being offered a free antenna, which offers as many as 45 free broadcast TV channels from Rhode Island and adjacent markets.

Four large telecom companies won the bulk of the available licenses to operate their wireless services on the upcoming 600MHz band, once UHF TV channels occupying part of it vacate. But what exactly did AT&T, Comcast, Dish, and T-Mobile buy and where? Mosaik, a mapping firm, produced maps (courtesy Fierce Wireless) showing exactly where the four companies won 600MHz spectrum in the recent auction. The differences are striking. T-Mobile effectively won the right to launch new service almost everywhere in the country, in part because it acquired a huge number of cheap, low-demand licenses in largely rural areas.

Dish’s plans for its spectrum remain a complete mystery, while Comcast’s winning bids are entirely within areas where it provides cable service. AT&T, although already holding a large supply of low band frequencies, apparently needs more capacity in larger cities, and paid handsomely to get it.

AT&T

Most of AT&T’s winning bids cover larger cities where it already operates an extensive cellular network. Among the areas where AT&T can expand service: Philadelphia, Washington, Baltimore, St. Louis, Birmingham, Mobile, Tampa, Atlanta, Dallas, Phoenix, Las Vegas, San Francisco, Salt Lake City, Seattle, Minneapolis and Little Rock. But AT&T also grabbed licenses for rural western Massachusetts, central Ohio, and southern Michigan.

Comcast

Comcast’s winning bids consisted of 10MHz of spectrum, except in Nashville where it nabbed 20MHz. Comcast grabbed enough spectrum to cover every city in Florida except Tampa (where Charter provides cable service). The cable company focused heavily on east and west coast bids, winning spectrum across much of the Pacific Northwest, the Boston-NYC-DC corridor, and Illinois and Indiana. The only downside is that 10MHz is not a lot of spectrum to support a large wireless service, but then Comcast does not require that at this time, because it will rely primarily on a shared arrangement with Verizon Wireless to power Xfinity Mobile.

Dish Network

What Dish intends to do with its spectrum remains a complete mystery, but it grabbed a significant amount of it in New York City and its nearby suburbs, including Connecticut. It also won respectable quantities of frequencies in Alaska, California, Florida, Puerto Rico, Seattle and Portland, and several midwestern and south-central cities.

T-Mobile USA

T-Mobile published a similar map as part of its press package claiming victory in the spectrum auction. This map better highlights T-Mobile’s extensive spectrum wins in all 50 states and Puerto Rico. If T-Mobile uses it all, it will command similar coverage areas comparable to Verizon and AT&T. T-Mobile will manage this without any need to merge with anyone else, as AT&T and Sprint have historically argued in their past failed efforts to acquire T-Mobile.

T-Mobile’s 600MHz coverage map — assuming it builds out its full spectrum purchase.

One of the most consequential and visible spectrum auctions ever is over, and it will have a significant impact on broadcasters, wireless carriers, and the future competitive landscape of the wireless industry.

The world’s first “incentive auction” paid television stations to voluntarily vacate or move their assigned channels to make room for the wireless industry’s desire for more spectrum to power wireless data services. Up for bid was 70MHz of spectrum currently used by UHF television stations. A total of 50 winning wireless bidders collectively agreed to pay $19.8 billion to acquire that space. The biggest winner was T-Mobile USA, which is paying almost half the amount of total proceeds to acquire 45% of the spectrum available in the current auction. T-Mobile managed to acquire enough spectrum to cover 100% of the United States and Puerto Rico with an average of 31MHz of available spectrum nationwide, quadrupling its current inventory of important “low-band” spectrum, which is excellent for covering rural areas and inside buildings.

Consumers are likely to benefit as early as later this year when T-Mobile begins lighting up cellular service utilizing the newly available spectrum. Unfortunately, customers will have to buy new devices compatible with the new bands of frequencies.

Having the spectrum alone is not enough to beef up T-Mobile’s network. The company will have to invest in a large number of new cell sites, particularly in outlying areas, to eventually rival the coverage of AT&T and Verizon Wireless. But with an ample supply of 600MHz spectrum, T-Mobile could soon challenge AT&T and Verizon Wireless’ perceived network and coverage superiority. After this auction, AT&T continues to hold the largest portfolio of <1GHz spectrum — 70.5MHz. Verizon is second with 46.2MHz and T-Mobile has moved up in its third place position with 41.1MHz.

Although the FCC claims the current auction was among the highest grossing ever conducted by the FCC, industry observers claim companies got the new frequencies at a bargain price. A 2015 spectrum auction attracted $44.9 billion in bids, more than double the amount bid this year. The average price wireless companies paid per megahertz per person this year was just shy of 90¢, compared with $2.72 in 2015.

Where bargains are to be had, Charles Ergen and his Dish Network satellite company are sure to follow.

Few companies have as much unused wireless spectrum in their portfolio as Dish. Ergen loves to bid in auctions and has also picked up excess spectrum available on the cheap from other satellite companies that have since gone dark or bankrupt. Dish spent $6.2 billion on spectrum during the latest auction, puzzling investors who drove Dish’s share price down wondering what the company intends to do with the frequencies.

Investors were hoping Dish would eventually sell its spectrum portfolio at a profit, something that could still happen if other wireless carriers see a deal to be made. But some Wall Street analysts fear Dish might actually build a large wireless network of its own to offer wireless broadband service. Wall Street dislikes big spending projects and the competition it could bring to the marketplace, potentially driving down prices.

The other possibility is that Dish is making itself look more attractive to a possible buyer like Verizon, which could acquire the satellite company to win cheaper cable programming prices for its FiOS TV and an attractive amount of wireless spectrum for Verizon Wireless. The nation’s biggest wireless carrier notably did not participate in this spectrum auction.

Another unusual bidder was Comcast. Craig Moffett from Wall Street firm MoffettNathanson called Comcast’s $1.7 billion bid “half-hearted” and said it was unlikely to be enough spectrum for the company to begin offering its own wireless service. Comcast plans to rely on Verizon Wireless to power its wireless service, at least initially.

Comcast targeted its bids only in cities where it already provides cable service, which also nixes the theory Comcast and Charter might have been working together to form a cellular joint venture. Moffett expected Comcast would seek at least 20MHz of spectrum across most of the country. It ended up with 10MHz and only in select cities. Moffett thinks that may signal Comcast’s interest in buying an existing wireless carrier is still on the table.