Hartford Business Journal

8 Hartford Business Journal • May 23, 2016 www.HartfordBusiness.com Changing the Frequency FCC repacking program creates growth opportunity for Meriden company By Matthew Broderick Special to the Hartford Business Journal N ick Wymant, chief technology officer of Meriden- based Radio Frequency Systems (RFS), is facing a rarity in business: a substantial growth oppor- tunity fueled by a shrinking market. In fact, his company has invested millions of dol- lars in recent years expanding its manufacturing capa- bilities to prepare for a production boon of broadcast equipment at a time when the government is trying to decrease the number of broadcast stations to clear room for more mobile broadband. At the heart of the opportu- nity is a first-time effort, led by the Federal Communications Commission (FCC), to purchase spectrum — the range of fre- quencies used to transmit sound, data and video nationwide — from broadcasters to, in turn, auction it to wireless providers. If the wireless market-share wars are being waged over cov- erage areas and data speed, spectrum is at the center of the battle. The auction is expected to place nearly 50 per- cent of the nation's spectrum up for grabs — a sale of capacity that will likely fetch billions from mobile pro- viders like Verizon, AT&T and Sprint and could be worth hundreds of millions of dollars in equipment sales to RFS in the next few years. "Spectrum is a finite resource," Wymant said. "And more broadband capacity is needed so mobile provid- ers can increase speeds and connectivity." In the U.S. alone between 2010 and 2016, the number of mobile- phone users has increased from 62.2 million to 207.2 million, according to recent data from online statis- tics company Statista. The Cellular Telecommunications Industry Associa- tion (CTIA) forecasts that by 2019 — when it's project- ed America will have nearly 237 million mobile-phone users — the nation will need to increase its existing supply of licensed broadband spectrum by 50 percent. To achieve that goal, Wymant said, the FCC in March initiated a reverse auction. The voluntary, market-based auction — made available to the nation's nearly 1,800 broad- cast stations — provided broadcasters with an opportunity to sell their spectrum and go off air, share a channel with another broadcaster, or move to a different frequency. "We expect that [after auction] between 800 and 1,200 broadcasters will remain and need to be repacked [assigned a different frequency]," Wymant said. That figure represents a potential revenue windfall for RFS, according to Wymant, not only because broadcast sta- tions will need new equipment to transmit different fre- quencies, but because the federal government — which is incentivizing remaining broadcasters to repack their channels — will provide $1.5 billion in funding to upgrade station infrastructures. That means plenty of high-end equipment will require updates, said Dennis Heymans from Myat, a New Jer- sey-based distributor of RFS equipment. "Broadcasters will need new transmitters, filters, antennas," Heymans said, noting the final price tag for upgrades could range from $500,000 to $1.5 million per station. Wymant anticipates that his company — one of three major manufacturers nationwide that specialize in glob- al wireless and broadcast infrastructure — could gain more than 300 new stations using RFS equipment, which could generate north of $250 million in sales over the next three years. RFS is seeing some early success as some stations — particularly in major metropolitan areas — have already begun preparing for the repack. The NBC Uni- versal affiliate in Dallas-Fort Worth, for example, has replaced two existing antennas with an RFS-manu- factured broadband antenna that can operate over an entire television frequency band. That expanded flexibility — which enables an antenna to capture a range of potential frequencies — is a major Q&A Murphy pushes 'Buy American' reforms in Congress Q&A talks with U.S. Sen. Chris Murphy on steps he's taking in Congress to strengthen Connecticut manufacturing. Q: Since being elected, you've embarked on a series of "Monday Manufacturer" tours. What are they and what's the impe- tus behind them? A: I launched my 'Monday Manufactur- er' series a year and a half ago to highlight the impressive contri- butions Connecticut's diverse manufacturers make to our state's economy and to our local communities. Supporting our manu- facturing economy and creating new jobs is a priority for me in the Senate. There's an untold story about Connecticut manufacturing in the 21st century — it's a high- tech, growing sector with jobs in demand. Our story is as much about the big household names like United Technologies, Electric Boat, and Stanley Black & Decker, as it is about the hundreds of small, mom-and-pop suppliers all across the state. My hope is that my 'Mon- day Manufacturer' series will help draw attention to this critically important sector, their contribu- tions to education and skills train- ing, and the policy reforms we need to revive manufacturing in Con- necticut and across the country. Q: What are some of the things you've learned on these tours? What do you plan to do with that knowledge? A: Visiting local manufactur- ers and talking to owners and employees firsthand is incred- ibly valuable. I bring the feed- back I hear back with me as I work in the Senate on policies that support American manu- facturing jobs. One of the main reasons I'm so committed to fixing our broken Buy Ameri- can laws is because I've heard firsthand from Connecticut manufacturers who lost busi- ness or were even forced to close because the federal gov- ernment awarded contracts to foreign companies. Q: As HBJ recently report- ed, there is a projected 600,000 worker shortage in manu- facturing, which currently employs 12 million nationwide. What are your plans for closing that gap? A: The demand for skilled workers is a great sign — it means our manufacturing sec- tor is growing. Community col- leges, technical high schools, and apprenticeship programs are on the front lines of closing the skills gap. In the Senate, I'm working hard to bring funding back to Connecticut to sup- port these programs. Specifically, I helped secure federal grants to expand job training in advanced manu- facturing, includ- ing a recent federal 'Ready to Work' grant that will train over 500 long-term unem- ployed workers in information technol- ogy, engineering and advanced manufacturing skills. Q: One of your initiatives has been to force the U.S. gov- ernment to consider American employment when it comes to buying goods. Where does that initiative stand and why is it just focused on the Depart- ment of Defense? A: My 'American Jobs Matter Act' is a very simple proposal: The Defense Department should give preference to American manu- facturers when awarding federal defense contracts. Most people assume that this already hap- pens, but it doesn't. Every job that we create overseas by awarding contracts to foreign firms is one fewer job here in America. It's time to change that. The American Jobs Matter Act is currently being consid- ered by the Senate Armed Ser- vices Committee. While this specific bill does focus on the Department of Defense, which is the source of the majority of federal manufacturing contracts in Connecticut, I'm working on a variety of other efforts to better enforce our existing Buy Ameri- can laws and close the most egregious loopholes in every government agency. In fact, I introduced the "21st Century Buy American Act" that would modernize Buy American requirements and close loopholes for all federal agencies. I've also introduced amendments to audit potential Buy American violations in agencies like the Department of Energy and the Department of Transportation. U.S. SEN. CHRIS MURPHY Continued Meriden's Radio Frequency Systems tests one of its antennas (center) in an anechoic chamber, which absorbs sound and electromagnetic waves. Nick Wymant, chief tech- nology officer, Radio Frequency Systems (RFS) FOCUS MANUFACTURING This is the broadband antenna purchased by NBCUniversal in Dallas, Texas. 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