Minority, Public TV Viewers Most Threatened in FCC Auction

Posted by on Aug 18, 2015 in Spectrum Policy | No Comments

The news last week that Sesame Street is migrating from PBS to HBO is not the only indicator this summer that the economic divide may be widening for the American viewing public.

Audience data indicates that two segments of the U.S. population will be hit especially hard by the upcoming FCC auction to sell off television airwaves to the wireless carriers: minorities, especially Latinos, and public television viewers. Where these two large groups of Americans overlap will be “ground zero” of this government-engineered shift from free, over-the-air television to a data plan near you.

People line up for free TV antennas, Eastern Market, Washington, DC, November 2014

People line up for free TV antennas, Eastern Market, Washington, DC, November 2014

By “clearing” today’s TV station from the airwaves, or spectrum, the FCC auctions will deprive millions of Americans the option of receiving free over-the-air (OTA) television from at least some of the stations they now watch. The threat to minorities and public television viewers comes from the fact that both groups rely on OTA, more than any other Americans. For viewers that are both minorities and public TV viewers, the impact could be devastating.

Billions to Move Free TV to Wireless Carriers

In the bi-partisan Spectrum Act of 2012, in response to a supposed “spectrum crisis,” Congress directed the FCC to conduct a massive transfer of the public airwaves, or spectrum, from television broadcasters to the wireless carriers, such as AT&T and Verizon. To induce broadcasters to “clear” their channels by going dark or shrinking their capacity, the law established an “incentive auction,” which the FCC has set for early 2016.

Public Stations Also “Incentivized” To Give Up Airwaves

The act makes no distinction between public and commercial broadcasters, a radical break from 60 years of reserving spectrum for public television, a policy established in 1952 thanks to the first woman appointed to the FCC. The potential “proceeds” to public station license holders – be they universities, local foundations, state agencies, or school boards – from selling any or all of the public TV spectrum under their control are eye-popping, up to hundreds of millions of dollars in major markets.

The law also attaches no strings to how those funds can be used. A state government, for example, could sell one or more of its public stations and use the funds to pave roads or pay down debt. A university could build a new athletic dorm. Nothing in the law requires that funds received from selling a public media station must be plowed back into any other kind of public media.

Minorities Leading the Return to Over-the-Air TV

People line up for TV antenna give away, San Francisco, July 2015

People line up for TV antenna give away, San Francisco, July 2015

The impact of clearing TV stations on minorities and public television viewers (often the same people) is made clear from U.S. audience data. Based on media research giant GfK’s 2015 Home Technology Monitor annual survey, 14.7% of all US TV households are dependent on OTA reception. Based on Nielsen’s total TV households in the U.S., GfK’s percentages translate to about 17 million homes, or 43.5 million people over age two, who are “broadcast only.” Data from both GfK and Nielsen indicate that OTA usage is growing as cord cutting accelerates.

A break out from GfK’s 2013 Home Technology Monitor survey, as published by the NAB, found that minorities currently make up 41% of all broadcast-only homes, up from 38% in 2010. The OTA reliance of groups breaks down to:

  • 23% of Asian American households (down from 30% in 2010),
  • 22% of African-American households (up from 12% in 2010 – an 83% increase!)
  • 25% of Latino households (up from 23% in 2010).

According to GfK, only 49% of Latino households that prefer speaking Spanish at home had a pay TV service in 2013 (down from 67% in 2010). This means that up to more than half of these households, 51 percent, rely upon free, over-the-air broadcasting.

Selling off their favorite TV stations—whether commercial or public, Spanish-language, English-language, or any other language—will force people to pay for cable, satellite, or fast broadband to receive programming and information they now get for free.

Public TV “Viewers Like You” Also at Risk

Public TV viewers of all ethnicities and income levels are another large group of Americans who rely on OTA television. According to 2015 research from GfK, among TV homes that watch PBS/PTV at least once a week, the proportion of OTA-only homes is 19.1% – significantly higher than the general population at 14.7%.

Public broadcasters have long seen these “cord nevers” as among public TV’s most loyal viewers. Forcing them to a pay service is not only the polar opposite of a “member retention strategy” for public stations, but also contrary to the very reason public TV was created in the first place.

Double Jeopardy for Minority Viewers Who Watch Public TV

At this time, I don’t have access to data that breaks out minority OTA viewership among public television OTA viewers. But it’s safe to assume that anyone falling to into both groups (a very large number of people) is in “double jeopardy” of losing a major viewing option – bad news for both producers and consumers of quality public television programming.

“Clearing” Viewing Options and Video Competition

By clearing broadcasters from the public airwaves, the FCC auction will be “clearing” options for American to access free, over the air television, even as more people are turning to it. This means less competition for pay TV providers, including wireless carriers who want to control video delivery to future mobile devices.

There were and are ways for Congress and the FCC to soften the impact on broadcast viewers, but they have not been adopted. The economic divide that is plaguing our country could only get wider as a result of the current spectrum policy.

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John M. Lawson is the president of Convergence Services, Inc, an Alexandria, VA consulting firm that specializes on techno-political strategy for the digital media industry. The views expressed are purely his own.

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