The airwaves, not the content sent over them, made a TV station valuable

Television broadcasting is all about visuals, but it turns out that the valuable part of WBIN-TV wasn’t anything that we could see.

Last Friday, Bill Binnie announced that he would be shutting down the state’s youngest television station because he had sold its broadcast spectrum – the right to send out its signals at certain wavelengths – to the Federal Communications Commission for $68 million, more than seven times the $9 million he paid for the station in 2011.

The FCC is buying airwaves from broadcasters around the country and will resell them for improving wireless internet services. In the widely reported announcement, Binnie also said he sold WBIN’s television license, a legal requirement for putting a TV station on the air, to an unnamed “major television group” for between $10 million and $30 million.

In other words, although Binnie said the sale “makes WBIN-TV one of the most valuable media properties in the history of New Hampshire media,” it wasn’t media that drew the money – it was the station’s access to a portion of the broadcast spectrum known as 600 MHz, which can easily travel long distances and penetrate walls.

It’s like somebody selling their restaurant when the new owners are mostly interested in the property’s road frontage.

Binnie has plenty of TV company in selling off spectrum, although he was unusual in shutting down the station rather than working around the loss of spectrum.

“There are about 1,800 full-power TV stations in the country. We expect that a couple of hundred will exit or channel share, but we won’t know that exactly number for another month or so,” said Dennis Wharton, vice president of communications for the National Association of Broadcasters.

Channel sharing is a way for a station to remain on the air by piggybacking on another station’s spectrum, forcing them to switch channels. WBIN’s press release said the station’s license was sold in a “channel-sharing sale,” although no further details were available.

Binnie’s announcement, and those of many other broadcasters, came out this week because the FCC lifted an embargo. It had previously forbid stations that are participating in its spectrum auction from making any announcements.

Among those who announced spectrum sales were Vermont Public Broadcasting, which unloaded part of its spectrum allotment for $56 million; networks like Spanish-language Univision, CBS, and Gray Television, which sold spectrum from numerous stations for hundreds of millions of dollars each and may shut some as-yet-unspecified stations; and an independent French-language station in New York City that sold its spectrum for a whopping $212 million.

Big money – and yet disappointing.

“I think the whole story of this auction is that people were expecting to take a lot more money than ultimately proved to be the case,” said Kathleen Kirby, an attorney at Wiley Rein law firm in Washington who specializes in broadcast law.

Wharton at NAB said the sale of broadcast spectrum, in the 600 MHz range, brought in “just short of $20 billion.”

“That sounds like a lot, but it’s not in comparison to most recent auction, which raised $44.6 billion” for a portion of the spectrum in the 700 MHz range, he said.

The broadcast spectrum was expected to be particularly valuable – “beachfront property” was a term often used in the industry – because of its characteristics. That’s why many small stations, even tiny community-access stations, were being sold for surprisingly large sums within the past decade.” The new owners wanted access to their spectrum allotment in anticipation of a sale.

The spectrum auction is the result of the FCC’s National Broadband Plan in 2010, approved by Congress in 2012. Regulators said the nation needed to shift some of the limited broadcast spectrum away from over-the-air TV in order to keep wireless phones and wireless data services operating.

It will probably take at least three years for this spectrum to be used by wireless providers, partly because of technical issues, including “repacking,” in which spectrum is shifted around to avoid interference and to be more efficient.

Television stations were given portions of the broadcast spectrum in past decades, but they need less of it these days because digital programming is far more compact than older analog systems. Competition from paid and Internet-based media is also making over-the-air broadcasting less important.