FCC Chairman Implores Broadcasters To Participate in 'Incentive Auctions'

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By Paul Barbagallo  


Television broadcasters should not be “afraid to be interested” in returning all or part of their airwaves to the government, said Federal Communications Commission Chairman Julius Genachowski.

The chairman, delivering a speech to the National Association of Broadcasters convention in Las Vegas April 16, urged TV stations not to pass up the opportunity to participate in forthcoming FCC-run “voluntary incentive auctions,” in which broadcasters, who license their spectrum through the commission, could voluntarily release some--or all--of it back to the government in exchange for a share of auction proceeds.

“You'll receive a considerable cash infusion,” Genachowski told conference attendees, according to a transcript of his speech distributed by the agency.

The congressionally approved incentive auctions are intended to free frequencies to meet the rising consumer demand for bandwidth-hungry smartphones and tablet computers.

The FCC, in its National Broadband Plan in March 2010, set a goal of reclaiming as much as 120 MHz of broadcast TV spectrum, which would then be auctioned off to mobile internet providers led by Verizon Wireless and AT&T Inc. But although the Temporary Payroll Tax Cut Continuation Act of 2012 (H.R. 3630) stipulates that about $15 billion of the $30 billion extension in unemployment benefits will be paid for with the proceeds of incentive auctions, nothing in the measure will force TV broadcasters to relinquish their airwaves.

'Phones Ringing at FCC.'

At least so far, the initial response from many broadcasters has been “positive,” Genachowski said.

“Since passage of the law, our phones have been ringing at the FCC, with broadcasters and their representatives expressing genuine interest in participating and asking thoughtful questions,” he said. “To those of you who haven't yet considered the possibilities, let me offer this: Don't be afraid to be interested in incentive auctions. Others already are.”

Genachowski made it clear to broadcasters that any return of their spectrum will be purely voluntary. He further pointed out that $1.75 billion will be made available to compensate stations that choose not to participate in the auction and are then relocated to other channels. And, lastly, he noted that the legislation (H.R. 3630) provides three options for TV station owners: contribute all 6 MHz of spectrum; agree to channel share; or move from UHF to VHF.

“We're focused on implementing incentive auctions in a way that maximizes the broad opportunity for investment, innovation, and economic growth,” Genachowski said. At the same time, the FCC is also “committed to getting you [broadcasters] the information you need to make sound business decisions and to help you recognize the full value of the opportunity,” he added.

Some of those answers might come in an order the commission is scheduled to adopt at its April 27 meeting, he said.

But in the near term, the commission still wants input from broadcasters. “That is why we have already begun reaching out to get your ideas on how to develop auctions with the right incentives to encourage broad participation,” Genachowski said. “And for those who don't want to participate in the auction, let me be clear once again: We're committed to the continuance of a strong and healthy broadcasting industry, we're committed to fair treatment. And of course--as the FCC proposed--the law provides substantial funds to defray expenses associated with moving channels. The bottom line is every broadcaster has an interest in the auction's success. The more stations that participate in the auction, the more spectrum we will be able to repurpose for flexible use and the healthier the broadcast industry will be as it moves forward.”

Rules Could be Proposed by Fall.

Genachowski used his speech, in part, to frame what comes next for agency.

He revealed that the FCC may propose rules by the fall regarding how it will conduct incentive auctions.

He also announced the appointment of Gary Epstein to co-lead the FCC's recently constituted Incentive Auction Task Force. Epstein formerly was the FCC's Common Carrier Bureau chief under Chairman Mark Fowler and was the first head of the agency's digital TV transition initiative. Most recently, he was managing director and general counsel of the Aspen Institute's International Digital Economy Accords Project.

“Working together, we can make incentive auctions a win-win for broadcasters, our economy, and the public,” Genachowski said.

The broadcasters' spectrum has been held out by the wireless industry as “beachfront property,” suitable to solve what Genachowski himself termed the “looming spectrum crunch.”

According to industry estimates, between 300 and 400 TV stations would need to be moved off of the broadcast-TV band to repurpose 120 MHz of broadcasters' spectrum.

To date, not one major TV broadcaster has publicly said it would give back spectrum.

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