Market Size, VHF Allocations, and the Viability of Television Stations

Abstract

In its Sixth Report and Order issued in I952, the Federal Communications Commission made two decisions which have profoundly affected the structure of the television broadcasting industry.' First, the Commission rejected the proposal of the then-existing Dumont Television Network for a television system based on a relatively small number of powerful regional stations and opted, instead, for one in which there would be a large number of local stations. This decision required that the Commission allocate additional spectrum space to television since the limited amount of space in the Very High Frequency (VHF) band which had previously been assigned was inadequate to support the large number of stations contemplated. This space was found in the Ultra High Frequency (UHF) band and this led to the Commission's second major decision. It chose to assign both VHF and UHF stations to the same markets, a policy which has been called intermixture. The results of the Commission's decisions became apparent during the next few years. While the frequency allocation plan called for approximately I200 stations in the UHF band and although I2I such stations were in operation by I954, by I960 only 76 continued to operate.2 The difficulty was that UHF stations did not compete on an equal basis with VHF stations, both because many households did not own sets capable of UHF reception and because of the inferior transmission characteristics of UHF signals. In the early i96os, several plans were proposed to overcome the handicap that UHF stations faced.3 One proposal would have shifted all of television to the UHF band where there was sufficient space for all existing and prospective stations. Another would have created new allocations in the VHF band by means of 'short-spacing', reducing the required geographic separations between stations operating on the same or adjacent channels. A third plan was called deintermixture because it would have had all stations in the same market operating on either VHF or UHF. None of these plans was adopted, however, largely because of opposition from stations that would