Antenna Manufacturers, NAB Say Freeze Hurting Industry as Repacking Approaches
Antenna industry officials said the FCC freeze on modifications to stations is hurting their business just as the approaching spectrum repacking seems likely to increase demand for their products. “When something like that is done at the FCC that impedes broadcasters, it affects manufacturers,” said Alex Perchevitch, president of Jampro Antennas. He and other industry executives, along with the NAB, said the April 5 freeze (CD April 8 p5) on station modifications was partly to blame for the April 19 announcement that Dielectric Communications, one of the largest broadcast antenna manufacturers, will go out of business. “The government’s just destroyed the biggest antenna company, and now they want to have a repacking that will put a terrible demand on manufacturing,” said one antenna industry executive. “That’s the dumbest thing I've ever seen."
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In their release announcing Dielectric’s demise, parent company SPX blamed the shuttering on “extremely difficult global economic conditions in the broadcast marketplace” and has declined to comment further. But executives at several other antenna manufacturers said they believe the FCC modification freeze was the final straw for the company. Thomas Silliman, CEO of Dielectric competitor Electronic Research Inc., said that because of the freeze and its deadline for modification applications, antenna manufacturers could easily calculate how many new projects they were likely to receive going forward—and that there wouldn’t be enough. “[SPX] could see that they couldn’t support their business on that amount of work,” said Silliman.
The NAB has also blamed the station modification freeze for Dielectric’s demise (CD April 29 p15), and on Monday sent a letter to the FCC Media Bureau calling for the freeze to be lifted (http://bit.ly/13nxLMO). “The notice establishing the freeze failed to provide a convincing rationale for bringing the broadcast business to a standstill, said the letter to Media Bureau Chief Bill Lake. In the letter, the NAB said the Media Bureau hasn’t answered questions about how many stations are affected by the freeze, or how many had pending applications that were halted because of it. “There clearly has not yet been an adequate examination of the true costs and benefits of such a freeze, including its impact on related industries beyond broadcasters and their viewers.” A Media Bureau spokeswoman declined to comment.
Broadcast attorney and former NAB general counsel Jack Goodman said he has clients who were prepared to begin adding new antennas when they were informed by the FCC that because of the freeze and the timing of their application, they won’t be protected during the repacking, and thus could have their channel taken away from them. “My client can’t build if the station won’t be protected,” Goodman said.
Silliman and Perchevitch said the hit their industry is taking from the freeze is particularly bad because of the important part they will play in the repacking after the spectrum incentive auction. Perchevitch said as stations are assigned to new channels, they will each require new, unique antennas, which only a few companies --such as Dielectric -- are able to build. Silliman said the timing is a one-two punch -- companies like his receive less business because of the freeze, but have to weather that storm while still preparing to meet the increased demand of the upcoming repacking. “They're making decisions that are crippling the industry,” he said.
In their letter Monday, the NAB said the industry gap caused by the failure of Dielectric means the spectrum auction will have to be delayed. “At this point, and perhaps as a result of the freeze, the timeframe set forth in the incentive auction legislation no longer appears to be possible.” Perchevitch is less sure, but said the auction could be affected. “Without Dielectric, the industry could have trouble meeting that demand,” he said. But Silliman disagrees. “There’s nothing Dielectric did that we wouldn’t be able to do.” He also said that with Dielectric going down, he’s starting to get more orders, offsetting some of the slowdown from the modification freeze. There’s also a possibility that someone could step into Dielectric’s shoes; Silliman and Perchevitch said SPX is selling the intellectual property rights to Dielectric’s products, though there are few companies equipped to manufacture them.