Former TV Exec Forms Coalition to Lobby FCC on Incentive Auctions

Keep up with the latest developments and legal issues in the telecommunications and emerging technology sectors, with exclusive access to a comprehensive collection of telecommunications law news,...

By Paul Barbagallo  

Preston Padden, a former FOX, ABC, and Disney executive, announced Nov. 13 the formation of a coalition of television station owners interested in participating in the Federal Communications Commission initiative to buy spectrum from broadcasters that the agency can auction to wireless carriers such as Verizon Wireless and AT&T Inc.

“The FCC has only one shot to get it right,” Padden said in announcing the new group, which will be called the Expanding Opportunities for Broadcasters Coalition.

“The coalition is dedicated to ensuring we have the rules and procedures in place to maximize the auction's chance to succeed,” he added.

The FCC is expected to finalize rules for the first-ever incentive auction in 2013, and set a date for the auction sometime in 2014.

Padden, in his announcement, did not disclose a list of coalition members, or indicate the members' level of interest in participating in the FCC effort.

Broadcaster participation in the incentive auctions is voluntary under the Temporary Payroll Tax Cut Continuation Act (Pub. L. No. 112-78), which authorized the commission to hold the auctions.

Broadcasters interested in participating have three options: contribute their full 6 megahertz allocation of spectrum, agree to share the same channel with another broadcaster, or move from UHF to VHF. Nearly $2 billion will be made available to compensate TV stations that choose not to take part in the auction and are then relocated to other channels.

For those stations who decide not to relinquish their airwaves and are then “repacked,” or squeezed into a smaller frequency band, the law states that the FCC must make “all reasonable efforts to preserve the coverage area and population served of every broadcast licensee.”

FCC Chairman Julius Genachowski hailed the announcement Nov. 13, saying in a statement that the incentive auctions will offer “significant opportunities” for broadcasters, “both those that will take advantage of a once in a lifetime financial opportunity, and those that will choose to continue to be a part of a healthy and diverse broadcast marketplace.”

The National Association of Broadcasters, which had lobbied for Congress to make participation in the auctions voluntary, said the industry “will continue to engage our members, the FCC, and others to develop an auction that allows volunteer broadcasters to be adequately compensated for leaving the business while holding harmless TV stations that remain on the air.”

FCC Commissioner Urges Simplicity, Fairness.

FCC Commissioner Jessica Rosenworcel, in a wide-ranging policy speech at a conference hosted Nov. 13 by the Silicon Flatirons Center for Law, Technology, and Entrepreneurship, said incentive auctions should be, among other things, simple and fair.

“This is especially true with regard to the treatment of broadcasters that do not participate in the auction,” Rosenworcel said. “Fairness demands that we consider how to accomplish repacking by minimizing unnecessary disruption and maximizing the ability of the public to continue to receive free, over-the-air television. At the same time, we ask that broadcasters make a fair assessment of the opportunities that this auction provides the industry. By offering incentives to share channels and incentives to relocate from the UHF to VHF band, this auction can mean new resources for broadcasters to develop new programming and deploy new services.”

Addressing the broader FCC efforts to make available additional spectrum for mobile broadband uses, Rosenworcel added that the supply of “unencumbered spectrum” is only going down.

“The pressure is on,” she said.

As with incentive auctions, Rosenworcel said, the government should offer financial incentives to federal agencies to give up their spectrum for sharing or auction to wireless carriers.

“What if we were to financially reward federal authorities for efficient use of their spectrum resource? What if they were able to reclaim a portion of the revenue from the subsequent re-auction of their airwaves? Would they make new choices about their missions and the resources they need to accomplish them? I think so. I believe this is an idea worth exploring,” Rosenworcel said.

Request Tech & Telecom on Bloomberg Law