FCC Message of Voluntary Incentive Auctions Gets Mixed Reaction at NAB Show

LAS VEGAS - Broadcasters had mixed responses to a speech in which FCC Chairman Julius Genachowski stressed what he called the importance of freeing up spectrum for mobile broadband through voluntary incentive auctions, they said in interviews Tuesday at the NAB Show. “We respect the position that there is a need for spectrum, but there is a lot of information that is not fully developed,” said Paul Karpowicz, president of Meredith’s Local Media Group and a member of the NAB executive committee. Genachowski emphasized a need for cooperation and attacked some arguments against the commission’s auction plans.

"The data couldn’t be clearer” in proving that there’s a spectrum crunch, contrary to skeptics, Genachowski said. He also tried to dispatch contentions that some licensees are warehousing spectrum and the government should do a full spectrum inventory before holding an auction. “Market forces and build-out requirements are designed to ensure that those who paid for spectrum at auction will put it to its highest and best use,” he said. Genachowski repeatedly said the proposed incentive auctions would be voluntary for all participants. “At the same time, voluntary can’t mean undermining the potential effectiveness of an auction by giving every broadcaster a new and unprecedented right to keep their exact channel location,” he said. “It would give any one broadcaster veto power over the success of the auction."

"It was nice that he stressed it was voluntary,” said Ben Downs, a Bryan Broadcasting vice president and member of the NAB radio board. But Genachowski seems “intractable” on his goals for the auctions, Downs said. “This is a situation in which we're willing to talk, but I'm not sure the outcome will be any different.” Genachowski’s speech didn’t draw much applause, Downs observed. “It was certainly a quiet group.” The crowd wasn’t “sitting on its hands,” said Steve Newberry, Commonwealth Broadcasting CEO and chairman of the NAB joint board. Instead, broadcasters were listening intently, he said. Genachowski “makes a case for his position,” and NAB President “Gordon Smith makes a very strong case for our position,” Newberry said. “There’s certainly an opportunity to meet” Genachowski’s goals while protecting broadcasters’ future, he said.

CBS won’t volunteer any of its stations’ spectrum for auction, CEO Leslie Moonves said in an on-stage conversation with Smith after Genachowski’s speech. “As long as it remains voluntary, we're fine with that, because we are not going to volunteer,” he said. “But as we see in Washington, things change. Deals are made and suddenly that word ‘voluntary’ and ‘incentive’ gets changed.” If it does, and aspects of the auction are not voluntary, “it would hurt our business,” Moonves said. “It would hurt our ability to deliver what we're going to deliver. We can’t sit back and not make ourselves heard here."

The NAB is in “full battle mode” to protect stations from being forced to give up spectrum, Smith said in a speech Tuesday. “If a station simply can’t make it and volunteers to sell its spectrum, that’s fine,” he said: “As long as it doesn’t harm another station that wants to stay in business. The problem is that what is voluntary for the former could become involuntary for the latter."

Wireless industry officials rushed Tuesday afternoon to support Genachowski and criticize the NAB. “These kinds of stall tactics are unnecessary and need to stop,” CTIA CEO Steve Largent told reporters by email. He said, “Since there is a large amount of broadcast spectrum, as well as a variety of other sources, that is underused or unused, we need to make sure this finite resource is put to its most efficient use.” Wireless Communications Association President Fred Campbell said in an email, “Demand projections supporting the need for more spectrum already assume all previously auctioned spectrum will be built out. Broadcasters are the ones warehousing spectrum they received for free and use to serve only ten percent of the population.”