Los Angeles Business Journal

Dialed In

Channels share one signal so they can sell second By Jonathan Polakoff Monday, March 17, 2014

KJLA also has nine subchannels. They can be found by plugging in decimal numbers, such as 57.2, into a remote.

Now, the study is helping the stations figure out exactly how much of that programming each station could keep on the air under their spectrum-sharing arrangement. It’s an exercise in understanding the finer points of data compression.

If the KLCS and KJLA test shows they can broadcast two or more high-definition channels simultaneously, it would be considered a coup for channel sharing, and would likely help the FCC persuade many more broadcasters to participate in the spectrum sales. Results of the study are expected next month.

Both stations acknowledged that some of the subchannel programming might have to be cut, especially in the case of broadcasting in high-definition, which uses more data.

But Alan Popkin, director of engineering at KLCS who is overseeing the pilot program, said that if the financial return from a spectrum sale is great enough, there could be a strong case to give it a try. One option would be to create an endowment with the proceeds to fund operations into the future.

“It’s a question of whether we can create a situation where it will fund the station in virtual perpetuity,” he said.

‘Real-world demonstration’

The push to free up broadcast spectrum comes largely from the wireless industry. Washington trade group Wireless Association, with membership that includes wireless carriers and handset makers, is financing the channel-sharing trial, which began earlier this year.

The FCC hopes to free-up 120 megahertz of spectrum from TV stations to sell to wireless carriers in an auction scheduled for the middle of next year.

The commission is focused on a band of spectrum from 20 TV channels that includes KLCS and KJLA.

Big markets such as Los Angeles are the priority, and the goal is to improve mobile broadband service and increase coverage for 4G networks and the like, as mobile Internet use surges.

A study from Georgetown University’s McDonough School of Business found that in next year’s spectrum auction, wireless companies could pay a total ranging from $19 billion to $31 billion.

The amount stations stand to gain will become clear later, since the FCC has not finalized the rules. But assuming sales are in the middle of that estimate, the average 6 megahertz channel would go for about $1.25 billion. However, most of that money – perhaps in excess of 90 percent – will go to the government. And whatever money a station receives likely would be split with its partner in its shared-broadcast arrangement.

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