Could BSU sell WIPB, take it off air?

MUNCIE — Ball State University could be paid up to $277 million at auction to relinquish the license of WIPB and take the public television station off the air.

While $277 million is the opening bid price set by the Federal Communications Commission if Ball State participates in the auction — to free up frequency for wireless broadband companies like T-Mobile — experts say it's unrealistic to expect the university to receive that much.

"For all practical purposes, we've fired the starting gun," FCC Chairman Tom Wheeler said last month. "The release of final opening bid prices, combined with the detailed application procedures and other data released yesterday, provides broadcasters with all of the information they need to decide whether to apply to participate in the auction."

The government's proposed purchase in a "reverse auction" of some of the wireless frequencies used by the nation's commercial and public television stations, along with the sale of those frequencies to wireless broadband companies in a "forward auction," is being called a groundbreaking event to allow market forces to determine the best use of spectrum.

Electromagnetic spectrum, or just spectrum, is the huge range of wireless frequencies used for all sorts of different things, such as X rays, baby monitors, garage door openers, smart phones, tablets and broadcast TV, according to the Corporation for Public Broadcasting (CPB). Everything wireless uses spectrum, and certain parts of the spectrum, including broadcast TV, satellite, radio and mobile, are licensed by the government so the signals don't interfere with each other.

The opening bid price of $277 million for WIPB, owned by Ball State, is the maximum amount the government will pay the university to relinquish its license and go off the air. The opening price for WIPB to relinquish its UHF channel and move to a lower broadcast televsion brand (VHF) is $111 million.

Experts indicate most starting prices will drop when the auction starts based on how many TV stations participate in it and how much space is needed in a market.

Ball State's board of trustees in September authorized President Paul Ferguson to participate in the preliminary auction process. The university has until Dec.18 to file an application to participate, an entirely voluntary decision. The university also could make money in the auction by relinquishing its current channel in order to share a channel with another broadcaster after the auction

The opening bid price for WIPB to move off the air is higher than the starting prices for some of the commercial, network-affiliated Indianapolis TV stations like WTHR ($182 million) and WTTV ($257 million).

"That's because of the interference," says Barry Umansky, a Ball State telecommunications professor and former FCC attorney. "We (WIPB) cause a lot of interference that can muck up that core area of where the people live in Indianapolis, in Noblesville and in Carmel. There's an old adage, for every ounce of service a radio or TV station puts out a pound of interference."

WIPB-TV, whose 800-foot tower is located south of Muncie near Cowan, has primary viewing in 22 counties with its over-the-air coverage.

"But that's the service contour," Umansky said. "The interference contour goes farther."

'Staggeringly high $'

While nearly every TV station in the country will get an opening offer to sell, the FCC is expected to buy spectrum in large markets, geographically adjacent markets or congested markets where there are a lot of broadcasters, according to CPB.

"New York and L.A. are the two most congested areas, and it's highly likely they will buy a number of stations there for very high prices," Perry Metz, director of radio/TV services at Indiana University, told The Star Press. "But in Wyoming it's not congested, and it seems unlikely they will buy anything there."

WIPB is part of the Indianapolis television market, the 27th largest in the country, just behind Baltimore and just ahead of San Diego.

"Obviously Muncie doesn't have a congested market, but Muncie is within the orbit of Indianapolis, Fort Wayne and Dayton, and that could pose what is called interference problems," Metz said. "If the FCC is trying to clear spectrum in those other cities, there are some circumstances under which the Muncie station would be very valuable. What no one knows is, how they will do that puzzle. It's very complex, and it might be they don't need any stations in the Indianapolis area."

Because of the potential amounts of money involved, "every station has to pay attention to the auction," he said.

How much money? "We know all of these opening bids are artificially high to get everybody's attention,"  Metz said. "They are not going to sell for that price in Indiana."

Umansky said: "The most possible WIPB could get is about a quarter of a billion dollars if they gave up the ghost and went off the air. But frankly, these numbers are illusory, because at any auction, you must have a willing seller and a willing buyer. Still somewhat unknown is the bidding vigor that the wireless companies, the big guys, AT&T, Verizon, T-Mobile and Sprint, are going to come to the table with. That's still an open question. I don't think you will get what the FCC issued. It most likely will be substantially less."

Metz would be disappointed if any of Indiana's eight public TV stations go off the air because "I think they each serve an important market and they blanket the state with what I think is valuable educational and enriching content. They could, however, continue to operate through cable, satellite and online. You don't have to broadcast over the air to be on a cable system."

An estimated 18 percent of the viewers of Indiana University's public television station WTIU watch over the air (as opposed to cable, online or satellite). "But for those people, we may be the only channel they get," Metz said. "Think of the area outside Delaware County not headed toward Indianapolis. You have some rural areas that may not have access to many channels over the air."

Umansky says,"I am a big believer in over-the-air locally responsive television. I think it has been the ace in the hole for communities — the ability to have electronic media address the needs and interests of the community and offer programming responsive to that is the touchstone of local broadcasting. Over-the-air broadcasting still has tremendous capacity to reach large numbers of people, especially in times of emergency. That's why we have an emergency broadcast system."

He added, "A lot of people are really outraged how much they're having to pay these days for cable TV subscriptions. Some people are cutting the cord. Any TV station in the country, if you are located close enough to the transmitting antenna, you can pick them up over the air with rabbit ears or a rooftop antenna."

The advantage to Ball State for selling its TV station is "you could use the money in so many ways, and some of these sums look staggeringly high at a time of constricted state budgets."

WIPB says it has no way of knowing how many of its viewers watch over the air. In fiscal year 2014, the station's operating expenses, $4.6 million, exceeded operating revenue by $497,214. Revenue included a CPB grant, memberships and subscriptions, business and industry underwriting, and support from the university.

The station provided 126 hours of local programming in 2014, including live coverage of Ball State sports, a new program called Indiana Weekend that explored fascinating people and places off the beaten path, and  health issues facing the community.

The station's production truck is one of the busiest in the state, and Ball State's telecommunications program is very highly thought of, Metz said.

Ball State's board of trustees in September authorized the president to participate in the preliminary auction process to determine "whether the university can fulfill its commitment to quality participation in Indiana Public Broadcasting and whether the university can fully achieve its academic mission should the auction proceed to completion."

The action by the trustees "does not obligate the university to anything, it just keeps us in the loop," spokeswoman Joan Todd told The Star Press. "We can’t speculate on potential outcomes until we know what, if any, bids might come in."

Contact Seth Slabaugh at (765) 213-5834