The time for the tower industry to begin operational ramp up is fast approaching. This significant business opportunity is linked to the FCC Spectrum Incentive Auction, which is now in its final stage.
The spectrum auction is a process designed to transfer spectrum from the broadcast industry, where it is currently underutilized and therefore not required, to the wireless carriers experiencing an expanding need for spectrum related to the growing demand for services.
What this means for the tower industry is a four-year spike in demand for its services – site management, consulting, engineering, research and development, tower and antenna manufacturing and, of course, tower erection by trained and qualified crews – to name a few. So, the question becomes: when does a tower company begin to make operational changes to accommodate the anticipated onslaught of demand?
The FCC has set a 39-month window for the transition of spectrum from broadcasters to purchasers of that spectrum – wireless carriers. That 39-month clock begins to tick at the Commission’s release of what is called the Auction Closing and Channel Reassignment Public Notice, which will specify the effective date of the post-auction repacking. Importantly, it will also announce the post-auction channel assignment and technical parameters of every station eligible for protection in the repacking process that will remain on the air after the incentive auction.
Repacking involves the reorganization of television stations in the broadcast television bands so that stations that remain on the air after the incentive auction occupy a smaller portion of the UHF band thereby freeing up a portion of that band for wireless services uses. This process, clearly, will require the services which are provided by the tower industry.
In anticipation of the repack, the FCC is currently considering a post-incentive auction transition scheduling plan as outlined in the FCC Media Bureau’s Public Notice. Under the provision of this plan, one issue presented is whether the repack will proceed on a regional basis. Many interested parties filing ex parte filings in this proceeding (T-Mobile, AT&T and the National Association of Broadcasters) have supported conducting the transition on a regional basis. These parties have pointed to the availability of tower crews and RF and structural engineers, in addition to antenna manufacturing capacity, as key issues of consideration in developing a transition plan. The regional approach, it is argued, will be the most efficient use of available resources.
Reports vary concerning how many qualified companies exist which can professionally and safely perform the work to be done at the completion of the auction. The FCC solicited what is referred to as the Widelity Report (named after the company which prepared it). The report was published in December 2013. In compiling this report, Widelity performed detailed research examining several repack-related issues, including tower crew availability and broadcast field, RF and structural engineering resources, to provide the information upon which the FCC could base its decisions. Completed in October of 2015, the Digital Tech Consulting report (“DTC Report”), funded by the National Association of Broadcasters, posited that there were a very limited number of companies and engineering consultants that had the expertise and/or properly trained crews sufficient to meet the significant demand created by the repack. Published in February 2016, the On Time, On Budget report, funded by T-Mobile, took issue with the DTC report, stating that the resources available to meet the demand were extensive. Ultimately, determining the number of those companies which will be competing for spectrum-related projects will become important as this estimate will, in part, determine the price point at which services are offered.
Tower service companies, which stand “at the ready” to move when the RFPs are requested by broadcasters and wireless carriers, will have the advantage of achieving the winning the bid. Staying apprised of the twists and turns of the FCC regulatory proceedings as they relate to the spectrum auction is pivotal for successful bidding. To support this effort to remain informed, contact Marlexar Research which offers research of legal and industry-related issues and content development services for the tower industry. Stay in the loop, stay informed, seize the opportunity.
Marina Lee J.D. is a communications law legal analyst with Marlexar Research, Raleigh-Durham, North Carolina. She provides law-related content development services to the media and communications industries. She can be reached at email@example.com.