How the Spectrum Auction Will Change Local TV Forever

A photo of people at an auction.
The spectrum auction won't look like this, but it will be exciting to see how it changes the TV industry. Photo © Rich Legg / Getty Images

Most TV viewers never think about the actual airwaves that carry the signal of their local stations. Those unseen airwaves are valuable real estate that cell phone companies would love to have. That's why the Federal Communications Commission (FCC) is taking the unprecedented step of making a tempting offer to TV stations to try to free up space for cell phone usage.

The Spectrum Auction

The FCC is holding what's called a "spectrum auction" starting March 29, 2016.

The owners of local TV stations have the chance to put their airwave space up for auction. If a deal is reached, a TV station would go off the air permanently, downgrade its signal or possibly share a channel with another station. In return, the owners of the station could pocket millions of dollars.

The idea is to free up space for enhanced smartphone use, including upcoming 5G technology. The airwave space for those devices has to come from somewhere, so the government decided this was the best way to make the transition. It's estimated that the auction will bring in $60 billion or more to the U.S. Treasury.

It will be a complicated process. There will be an auction to determine the value of a TV station's spectrum, then another auction to sell that slice of spectrum to a wireless phone company or someone else interested in having it. Then, the remaining TV stations will have their channel numbers reassigned so that they are "repacked" into a smaller and more efficient space, which will free up unused spectrum for cell phones.

Which Stations Are Putting Themselves Up for Auction?

Viewers will want to know which affiliate stations in their city are putting themselves on the market. That information is currently confidential, so as not to tip off a station's competitors.

A TV station isn't required to participate. But for a tiny, little-watched station that may be struggling to pay the bills, it might be easier for the station owner to cash in with this auction and walk away, rather than try to sell the station to someone else.

A station doesn't have to go off the air entirely. It can offer to share a channel with another station or move to a less desirable channel position, switching from UHF to VHF or the other way around.

How Will the Auction Affect TV Viewing?

It won't be until after the auctions are over that we'll know how this will affect TV viewing across the country. Stations have 39 months to go off the air or make other changes, so it will take time to know the full effects.

Here's a scenario of what could happen in a city: A small CW broadcasting network affiliate station goes off the air. Before anyone has a chance to panic over losing CW programming, the number one station in town picks up the CW to put it on one of its subchannels. As long as the cable and satellite companies pick it up, people at home might not know the difference.

It's possible that the biggest effect for viewers in many markets is simply rescanning their TVs, so that if channels have moved around, their TV sets can find them. That's a small inconvenience as TV station owners rake in millions of dollars and spectrum space is provided for the next generation of smartphones.

Viewers may simply shrug off what seems like a minor shakeup.

But in reality, it's proof that television broadcasting is having to step aside to make way for advances in telephone technology. That's indeed a wake-up call for those in the media industry that thought TV would never play second fiddle to any other device.