Fox, Ion, Tribune, Univision's Incentive Auction Interest May Boost Broadcaster Participation

That executives from four large broadcasters pledged in a meeting with FCC Chairman Tom Wheeler to help the commission hold a successful incentive auction “as quickly as possible” is seen as a positive sign for the auction. It's a possible reaction to NAB’s tactics and court challenge of the auction order, said broadcast attorneys in interviews Monday.

Fox Television Stations, Ion, Tribune and Univision said the FCC should increase transparency about the auction, set and publicize a high clearing target ahead of the auction, and increase flexibility for channel sharing, in an ex parte filing posted in docket 12-268 Monday. “Their evaluation of whether and how to participate in the incentive auction necessarily depends on the adoption of clear and effective rules that maximize the value of the potential opportunity for all broadcasters,” the four companies said. Along with Wheeler, the broadcasters met separately with the Incentive Auction Task Force and Commissioners Ajit Pai and Mignon Clyburn.

The four broadcasters are seen as trying to differentiate themselves from NAB’s opposition to many of the FCC’s auction policies and the Expanding Opportunities for Broadcasting’s support for auction policies that favor stations choosing to relinquish their spectrum, said broadcast attorneys with clients considering auction participation. As “established broadcasters with deep ties and abiding commitments to their communities, they assign high value to their existing businesses and operations, and they intend to continue to serve their viewers with the same high level of service following the conclusion of the incentive auction,” said the station owners.

An NAB spokesman disputed any characterization of their actions as opposing the incentive auction, pointing to a phone call between NAB President Gordon Smith and Wheeler in which Smith said NAB would be “expanding its advocacy towards helping the Commission shape and improve the reverse auction.” The phone call was Thursday, the day after the meeting with Fox, Ion, Tribune and Univision. The broadcasters coordinated with NAB before meeting with the chairman’s office, said a broadcast industry official.

The four broadcasters want the FCC to set a clearing target of 126 MHz and publicize it, they said. Doing so would provide broadcasters with a clear indication of the level of demand for spectrum, a broadcast attorney said. The ex parte filing also asks for more clarity on dynamic reserve pricing, an issue that EOBC and NAB have opposed.

EOBC Executive Director Preston Padden said the companies' -- which control 5 billion MHz pops of spectrum among them -- expression of interest in the auction is likely to drum up interest and make the auction more successful. "Our Coalition is delighted to see the Cavalry coming over the hill to assure a successful auction," he emailed. BIA Kelsey Chief Economist Mark Fratrik said their interest shouldn’t be a surprise. “It would be financially imprudent for them not to,” he said. The filing doesn’t promise auction participation, Fratrik pointed out, and the auction is a big enough opportunity that the company’s executives have “a fiduciary duty” to look into it, he said.

CEA President Gary Shapiro thanked broadcasters for publicly “considering participating in the upcoming spectrum incentive auction.” Their statements “are proof that the auction offers benefits to everyone involved,” Shapiro said in a written statement Monday. As a result of the auction, broadcasters “will be well compensated for spectrum,” U.S. taxpayers will see deficit reduction and better broadband services, and American innovators and entrepreneurs will get the spectrum they “desperately need” to “feed our growing demand for ‘anywhere/anytime’ access,” he said. The U.S. “is facing a nationwide spectrum shortfall, but this auction presents an excellent opportunity for us to free up more of our valuable spectrum and further fuel our innovation economy,” he said.

With so much broadcaster support for the auction, now would be a good time for the NAB to reach a settlement with the FCC in the association's court challenge against the auction, Padden said. “It’s clearly in the best interests of NAB and the FCC to settle that litigation.” The issue of the litigation was also raised during Smith and Wheeler’s phone call. NAB “looks forward to the prompt resolution of the pending petition for review of the Commission’s Incentive Auction Order in the D.C. Circuit,” Smith told Wheeler.