AT&T Inc. (T), Verizon Communications Inc. (VZ): The Window’s Closing for the ‘Next Wireless Land Grab’

The San Francisco Bay-area UHF station, KTLN, residing on channel 47, a religious-programming broadcaster, was bought for $8 million by OTA Broadcasting, a group headed up by computer impresario Michael Dell in 2011. OTA also owns three other stations: KFFV and MeTV in Seattle, and WEBR in New York City.

But UHF station owners are also facing a dilemma. If those in the higher channels don’t sell voluntarily, they might face eviction from their current FCC-designated spectrums and be moved to a new home to share spectrum with another station on a lower channel.

That process is called “packing” and could be done so the FCC can engage in future auctions of contiguous higher spectrum ranges to mobile operators. If that happens, their new spectrum becomes less valuable.

The auctions are planned for next year, though the broadcasting lobby is fighting against it, with the National Association of Broadcasters’ president, Gordon Smith, once calling it a “spectrum grab.”

Nevertheless, a speculator’s investment in airwaves could have a big payoff, with buyers hoping to sell for two or three times the purchase price, according to a television station broker Variety spoke to.

But there are still holdouts on the selling side. The broker mentioned one station that doesn’t even get a half million dollars in annual revenue “turning down offers of 50 to 60 million,” thinking it could eventually get $100 million.

Maybe so, but the window for getting that kind of money may be closing by the end of this year.

The article The Window Is Closing on the Next Wireless Land Grab originally appeared on Fool.com is written by Dan Radovsky.

Fool contributor Dan Radovsky owns shares of AT&T. The Motley Fool has no position in any of the stocks mentioned.

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