A proposed channel sharing trial between two Los Angeles television stations will test one of the choices with which the FCC has presented broadcasters that opt to accept a lucrative near-term payout in exchange for some of their spectrum rights.   We recently provided an overview of the many options available to broadcasters in the forthcoming auction.  Perhaps the most complicated of these options is channel sharing.  Under a simple channel sharing arrangement, two stations would enter into an agreement whereby one of the stations would participate in the auction and, if its offer were accepted, the two stations would then share a single 6 MHz channel to continue broadcasting post-auction.

In the Los Angeles pilot project, CTIA-The Wireless Association, along with television stations KLCS and KJLA, are requesting the FCC’s permission to “conduct a series of tests that will culminate in KLCS ‘hosting’ KJLA’s content and transmitting a shared stream that will combine the two stations’ primary and multicast content.”  A key component of the project will be attempting “a variety of HD and SD video feeds to confirm the feasibility and technical limits of channel sharing between two unaffiliated broadcast stations.”  The nature of the participating stations is noteworthy, as KJLA is a minority-owned station serving the U.S.-born Latino population and KLCS is an Emmy Award winning non-commercial station.  Many observers believe that channel sharing will be particularly attractive for non-commercial television stations and stations targeting minority audiences.

If the test demonstrates that it is feasible for two stations to broadcast at least one high definition signal each, it could make channel sharing an enticing option for some broadcasters who otherwise planned to sit the auction out.  These stations would receive an immediate influx of cash for giving up 6 MHz in the auction while maintaining their license to broadcast and their must carry rights.

But channel sharing may not be without a downside.  First, as we explained in our prior post, developing a channel sharing arrangement between arms-length parties can be extremely complicated and require great foresight.  Channel sharing stations are entering into a long-term business relationship that could prove difficult, if not impossible, to unwind (without one of the stations going dark).  Moreover, as the National Association of Broadcasters pointed out in its statement regarding the channel sharing pilot, “one of the main challenges to channel sharing concerns the ability of the sharers to offer new and innovative services as they are limiting their available spectrum.”  Any new technologies that require a full 6 MHz broadcasting channel could leave channel sharing stations behind.

If you would like more information about channel sharing, Wiley Rein has extensive experience in this area, including having structured the Los Angeles channel sharing trial, having participated in the FCC’s Channel Sharing workshop, and having prepared a template of channel sharing agreement issues/provisions.

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