Comcast buys $1.7B in wireless spectrum, paving the way for Xfinity cellphone launch

Comcast Corp. bought $1.7 billion in wireless spectrum controlled by TV broadcasters as part of a major reallocation of the nation's airwaves for smartphones and mobile devices, the government said Thursday.

Federal Communications Commission officials said in a conference call that 145 TV stations put spectrum up for sale nationwide but only a dozen or so of those stations might go dark, based on TV station responses.

Ten Philadelphia-area TV stations, among them WFMZ-TV, WGTW-TV, and WMCN-TV, sold spectrum for about $1 billion, according to the FCC's data. 

WFMZ-TV, an independent station based in the Allentown area, is owned by Maranatha  Broadcasting Co. and earned $140.5 million in the auction. 

WGTW is owned by the California-based Trinity Christian Center, and its airwaves sold for $80.8 million, according to the government data. Officials from both stations could not be reached for comment.

WMCN-TV, a station owned by Lenfest Broadcasting and dependent on infomercials for revenue, sold its spectrum for $63 million. "People aren't watching linear TV, and they certainly are not flipping up and down the channels to catch infomercials," said chief executive officer H. Chase Lenfest.

He is the son of cable billionaire and philanthropist H.F. Gerry Lenfest, the former sole owner of Philadelphia Media Network, which operates the Inquirer, Daily News, and The elder Lenfest sits on PMN's board and chairs the board of managers of the Lenfest Institute for Journalism, to which he donated the newspapers and website.

Also among the Philadelphia-area spectrum unloaders was New Jersey, which sold airwaves for Trenton-based WNJT, the FCC said.

"There is no need to worry about public television still being on the air after the auction," said Debbie Falk, spokeswoman for New Jersey Public Television, on Thursday. "The overlap of our tower signal in New Jersey allows us to continue broadcasting ... even if some of that spectrum is eliminated."

The Philadelphia stations and those in other cities that sold spectrum are expected to share channels with other TV stations. Government officials say this sharing and TV signal relocating will be accomplished by "repacking" TV airwaves.

The FCC announced the results Thursday in a massive release of information, ending months of a complex and largely unpublicized auction in which over-the-air TV broadcasters cashed out of their long-held airwaves and telecom companies bid on the relinquished spectrum.

About half of the almost $20 billion raised in the auction will flow to TV station owners. Most of the other money raised in the auction will be used to reduce the U.S. budget deficit, FCC officials said. Initially the FCC estimated it could raise tens of billion of dollars more than $20 billion. But the response to the auction seemed tepid.

"We are neither thrilled nor disappointed. This is how the auction worked," an FCC official said.

T-Mobile was the largest buyer in the spectrum auction run by the FCC, acquiring $8 billion of airwaves.

Satellite-TV operator Dish was the second-largest buyer, with $6.2 billion.

Neither AT&T Inc. nor Verizon Communications Inc., the nation's largest wireless carriers, was  among big spectrum buyers in the auction.

Comcast spokeswoman Jennifer Moyer said the cable giant couldn't comment much beyond the FCC data because of a government-mandated "quiet period."

Comcast bought the airwaves through a corporate entity identified as CC Wireless Investment LLC. The acquired airwaves could be used for Comcast's recently launched smartphone business, marketed as Xfinity Mobile.

John Hodulik, telecom analyst with UBS AG, said Comcast bought airwaves in its cable-TV territories and did not purchase nationally, which could have put the cable giant in competition with Verizon, AT&T, T-Mobile, and Sprint.

"It gives them room to experiment," Hodulik said of Comcast, while minimizing financial exposure.

In addition to buying, Comcast sold spectrum in cities with Comcast-owned NBC and Telemundo television stations: Philadelphia, New York, and Chicago. Those sales raised $481 million -- thus Comcast's total cost in the auction was about $1.2 billion, comprising what it paid for spectrum minus what it sold.

In each of those cities, the NBC and Telemundo stations will now share spectrum.

With the auction over, TV stations nationwide now have 39 months to adjust to spectrum changes, or the repacking.

"The complexity of this thing is beyond daunting," Dennis Wharton, spokesman for the National Association of Broadcasters, said Thursday. "It will make the switch to digital from analog look like a walk in the park."