Business & Economy

UPDATED: Vermont PBS sells broadcast license back to the feds for $56 million

Vermont PBS CEO Holly Groschner speaks at a new conference on Friday. Photo by Morgan True/VTDigger.
Vermont PBS CEO Holly Groschner speaks at a new conference. Photo by Morgan True/VTDigger.

(Note: This story was updated with comment from the Scott administration and the FCC at 5:08 p.m. Feb. 16)

COLCHESTER — Vermont PBS has sold one of its four broadcast licenses to the Federal Communications Commission for $56 million through the federal regulators’ spectrum auction, the broadcaster announced Friday.

The sale will not reduce the over-the-air reach of Vermont PBS, said CEO Holly Groschner during a news conference at its Colchester studio. The broadcaster will re-engineer its network to replicate coverage transmitted from WVTA on Mount Ascutney.

Engineers at the station have determined they can achieve the same coverage using signal repeaters and additional fiber interconnects, Groschner said. Vermont PBS will set up a system for people to report online if there’s any issues with their reception, she said.

“This is transformation money, but it’s one time money,” Groschner said, adding that it won’t diminish the broadcaster’s need for public support from government and donations.

Vermont PBS has a $6 million annual budget. It received $271,000 from the state last year, and Gov. Phil Scott’s proposed budget would level-fund that amount. It receives roughly $960,000 from the Corporation for Public Broadcasting.

Rebecca Kelly, a spokeswoman for Scott, said the administration was not aware of the license sale when it wrote its budget.

Asked if the announcement might change how much money the state gives the broadcaster, Kelly said it’s “certainly something we would look into.” She said she expects legislative budget writers may want to re-evaluate as well.

Lawmakers have considered making cuts to Vermont PBS in the past.

The Corporation for Public Broadcasting and stations that rely on its support face an uncertain future as President Donald Trump is reported to be looking at privatizing the public entity.

If Vermont PBS were to use the $56 million to pay its bills and cover its annual budget, the money would be gone in less than a decade. Instead, the broadcaster plans to use that money to steward its operation through the next half century.

The Vermont PBS board has begun a strategic planning process to determine how the $56 million can be used to “take us into the 21st century, both with our television broadcast and the new digital environment to communicate with all Vermonters,” Groschner said.

She said it was too early to say how they’ll use the money to achieve that goal, because she doesn’t want to preempt the stakeholder engagement and strategic planning the board has begun.

The FCC spectrum auction is designed to increase capacity for mobile broadband in order to meet America’s voracious demand for wireless internet access.

As the FCC explains on its website, “Today, there are more connected devices than there are people living in the U.S., and about 70 percent of Americans use data-hungry smartphones.”

The bandwidth freed up through the voluntary sale of licenses is also being sold at auction.

There are 62 companies that qualified to bid for the new licenses, including the big three wireless broadband companies AT&T, Verizon and T Mobile, said Charles Meisch, with the FCC Incentive Auction Task Force.

The FCC divided the country into more than 400 geographic regions, with seven licenses available in each region. Vermont is divided between three of those regions.

The spectrum for sale is packaged into a different product for wireless broadband, so the number of licenses sold does not correspond to the number available for purchase, Meisch said.

The FCC created incentives to serve the full area covered by a license, but it will still be up to winning bidders to decide how they deploy their network on the spectrum they purchase, Meisch said.

The wireless broadband licenses are for 12 years, but if a company doesn’t reach 40 percent coverage in a region by year six, the term of their license is reduced to 10 years. All companies are expected to reach 75 percent coverage before their license expires, Meisch said.

Vermont has struggled to get companies to run fiberoptic cable broadband to everyone in the state, but the economics of wireless broadband are much different, according to Meisch.

Companies don’t have to run cables underground or along poles to reach customers. Instead, wireless broadband reaches customers over the airwaves.

The spectrum being freed up by the FCC through its auction also has greater range than what’s been available to wireless broadband providers in the past, Meisch said.

“With this type of spectrum you know you’re going to get more bang for your buck in terms of towers and transmitters,” he said. The stronger signal should make it more attractive for companies to serve rural areas, he added.

Meisch said he could not comment whether specific license holders participated in the auction, and therefore could not confirm the $56 million figure from Vermont PBS.

A list he provided of broadcasters in the region eligible to sell some or all of their spectrum included local stations WCAX and WPTZ.

Disclosure: Morgan True is an occasional paid guest on the Vermont PBS program “Vermont This Week.”

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  • Paul Richards

    Can someone explain to me why driving up I 89 from West Lebanon to Burlington most of the stations received on the car radio are public radio stations? I many areas, at least 6 public radio stations can be received. I enjoy many of these but is this type of coverage really necessary?

    • John French

      Yes. Its called propaganda for socialism.We do live in a socialist state.

    • Lisa Nicholson

      The stations go in and out as you go thru the mountains so I like it since I move from one station to another.

  • Rob Bast

    “If Vermont PBS were to use the $56 million to pay its bills and cover
    its annual budget, the money would be gone in less than a decade.”
    But, if it were invested conservatively in an endowment, it would yield between 1 and 2 million dollars annually. This would represent, according to the numbers in the article, upwards of 20 percent of the annual budget, a very nice level of stability in these times.

  • Lisa Nicholson

    Can you translate this into concrete impact on the consumer? Will the stations impacted have the same programming or be controlled by another entity?