Big government might push your favorite TV and radio stations off the air

When it was first used, eminent domain was designed to aid large public infrastructure projects: If a small farm stands in the way of the construction of a highway, then the government forces the owner to sell it to the public. But the practice has evolved into something far worse. In the landmark case Kelo v. City of New London, the Supreme Court ruled that the city could claim the property of Susette Kelo for the use of a private redevelopment plan. In short, the investors would have been able to generate more tax revenue for the city, therefore the seizing under the Takings Clause of the Fifth Amendment was, in the eyes of the judges, legitimate.

Now, unfortunately, there might be another significant expansion of eminent domain — this time, into the digital realm.

In 2012, Congress authorized the Federal Communication Commission’s “incentive auction,” designed to realign the use of public airwaves. With the U.S. infrastructure being behind on the 21st century needs for broadband services, the FCC believed (rightfully) that the auction would end up providing better services for consumers. Among the top 10 bidders were companies such as T-Mobile, ParkerB.com Wireless, and AT&T. In total, the FCC repurposed 84 megahertz of spectrum, yielding $19.8 billion in revenue, including $10.05 billion for winning broadcast bidders and more than $7 billion, which the commission claimed would be “deposited to the U.S. Treasury for deficit reduction.”

The massive repurposing poses significant challenges to the current digital infrastructure. The structural upgrades on things like the antennas on TV towers will necessitate spending on renovations and will force broadcasters to look for new channel assignments, a task for which the FCC gave them 39 months. In 2012, Congress authorized $1.75 billion in spending to allow for the necessary renovations, ensuring broadcasters would have to endure no damage. With the $7 billion taken in through the auction, this seemed like the government had even gotten a perfectly good deal.

So then, end of story? Not quite.

After the end of the auction in March last year, it became clear that infrastructure spending requirements were higher than initially projected. Not only is the estimated cost closer to $2.1 billion, we now know that the 1,000 TV stations won’t be the only parties affected. The revamping also threatens hundreds of broadcasters which have transmitters co-located on TV towers that will be renovated or completely replaced. A study conducted in the summer last year found that more than 600 radio stations could completely vanish from the spectrum. Many of these TV and radio broadcasters operate with very thin profit margins and will not be able to pay for renovations themselves — nor should they have to.

In a recent Senate Commerce Committee hearing, FCC Chairman Ajit Pai stated: “I expect it would be necessary, if broadcasters are going to be harmless in this repack, that Congress would have to provide additional funding.” In fact, it could hardly be regarded as fair that the government pockets a full $7 billion from the auction without keeping its promise to broadcasters that they won’t be damaged by the very necessary renovations.

Numerous legislators from both parties have now come forward, suggesting solutions to the problem. In the Senate, Jerry Moran, R-Kan., together with Sens. Brian Schatz, D-Hawaii, Jim Inhofe, R-Okla., Todd Young, R-Ind., Richard Blumenthal, D-Conn., and Tom Udall, D-N.M., are suggesting the Viewer and Listener Protection Act, which would ensure that broadcasters will stay on air.

]In the House, Reps. Bill Flores, R-Texas, and Gene Green, D-Texas, have introduced the Radio Consumer Protection Act (H.R. 3685), which would which compensate all affected broadcasters, and unused funds would be returned back to the Treasury for the initial purpose of deficit reduction. It intends “to establish an additional fund in the Treasury to reimburse costs incurred by terrestrial radio stations as a result of the reorganization of broadcast television spectrum, and for other purposes.”

The digital infrastructure in the U.S. is in dire need of renovation, and the government’s auction provided better services for companies that were behind on the market. However, it is neither the government’s role, nor is it in its interest, to pick winners and losers in the telecommunications market. If the government doesn’t put up the money for the necessary renovations, numerous broadcasters will be forced off the air. States with the most stations possibly affected are Florida (137), New York (117), and California (109). This could very well be the end of the radio station you listen to when driving to work, or the TV station you get your local news from.

This means that the government is picking winners and losers in the market, with the losers being small broadcasters. Kicking local TV and radio stations off the air — in an unprecedented establishment of a form of digital eminent domain, just so that the federal government can pocket money it’s made on an unfair deal — is not the way to go.


This article was first published by the Washington Examiner.

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About Bill Wirtz

My name is Bill, I'm from Luxembourg and I write about the virtues of a free society. I favour individual and economic freedom and I believe in the capabilities people can develop when they have to take their own responsibilities.

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