FCC Auction Promises Bonanza for Small TV Broadcasters – By THOMAS GRYTA Jan. 5, 2016 9:16 p.m. ET


As momentum tilts toward the Internet, airwaves go on the block for billions in boon to tiny TV stations like those in Lima, Ohio

WLIO meteorologist Kyle Adams prepares for a broadcast in Lima, Ohio. The station’s nightly news also airs on all three local major-network affiliates.

WLIO meteorologist Kyle Adams prepares for a broadcast in Lima, Ohio. The station’s nightly news also airs on all three local major-network affiliates. PHOTO: J.D.POOLEY FOR THE WALL STREET JOURNAL

LIMA, Ohio—Workers accidentally struck oil here in 1885, putting this tiny city on the map as the world’s biggest oil field—a valuable patch that John D. Rockefeller later controlled.

Now Lima, (pronounced lye-ma), a rust belt town of 38,000 people, has another highly sought-after resource. This time, the riches are above ground and the deep-pocketed buyer is the U.S. government.

The Federal Communications Commission recently set opening prices for an auction of airwaves it gave away to many local TV stations across the country more than half a century ago. And by next week, broadcasters have to decide if they want to join the auction that will let wireless carriers like AT&T Inc. and Verizon CommunicationsInc. acquire those station rights for tens of billions of dollars.

The process gives small TV stations a chance to cash out just as their business faces challenges from online video, wireless services and shifting audience behavior. After multiple delays, the process is expected to begin in March. Nearly 2,000 stations across the country could join the auction to sell their broadcasting licenses.

In giant media markets like New York City and Los Angeles, the bidding will start out high. One station broadcasting in Manhattan, an affiliate of Telemundo, has an opening bid of $900 million. But smaller cities may hit the jackpot, too. In Lima, the first—and maximum—offer for its most-watched station is about $110 million.

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http://www.wsj.com/articles/fcc-auction-promises-bonanza-for-small-tv-broadcasters-1452046575

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