WASHINGTON — The Federal Communications Commission took a bold and historic step Tuesday when it proposed to sell as many as 90 licenses to operate TV stations.
If the auctions take place as currently scheduled, in fourth-quarter 1998, it would be the first U.S. auction of a license to operate a television station. The proposed auctions will be limited to TV channels that are not currently in use in markets across the nation. The proposal has no effect on the digital TV licenses the FCC currently is distributing to broadcasters.
Congress gave the FCC authority to auction unused TV and radio channels when it passed the Balanced Budget Act of 1997. In addition to raising revenue for the U.S. Treasury, the auctions also are intended to streamline the FCC’s process of awarding licenses for TV stations in cases where there are two or more applicants to construct a station. In most cases, the auctions will be limited to companies and individuals who already have filed an application for a particular license.
In many if not most cases, competing applications to build a new TV station have become entangled in a seemingly endless cycle of litigation that can take more than a decade to resolve. The entire process ground to a halt in 1993 when the FCC lost several court decisions that effectively forced the agency to abandon the criteria it used for choosing between applicants.
It is the hope of new FCC chairman William Kennard that by auctioning the airwaves, the process of awarding licenses to operate new TV channels will speed up dramatically. “I have lots of personal experience with this process; it just didn’t work,” said Kennard, who worked as a communications attorney before he joined the FCC as general counsel in 1993. At his first meeting as chairman, Kennard said Tuesday that he filed an application for a client back in 1984. That same application did not receive a final decision by the FCC until 1996, Kennard said.
Caught up in one of those tortuous cases is North Carolina broadcaster Zebulon Lee. After losing a radio station he already was operating to a competing applicant, Lee sought out the help of Sen. Jesse Helms (R-N.C.). Earlier this year, Helms threatened to hold up Kennard’s Senate confirmation until he discussed Lee’s problems with Kennard. Now, because of the FCC’s tentative conclusion, Lee may have another chance to reclaim his station through the auction process.
Although Congress gave the FCC authority to auction licenses for which there were applications filed before July 1, 1997, it did not order the agency to do so. However, in a unanimous vote that included all four new commissioners and holdover Susan Ness, the agency reached a “tentative conclusion” to auction the entire backlog of licenses for unused TV channels and radio frequencies.
The FCC also asked for comment on proposals to give women, minorities and small businesses bidding credits that would increase their chances of actually buying one of the licenses. Since he took over the chairmanship of the FCC last month, Kennard has said he would do everything he can to boost minority ownership of broadcast stations.
New commissioner Michael Powell also has joined Kennard in the effort to increase the ownership stake of minorities in radio and TV. Like Kennard, Powell noted that it may be particularly difficult to find a way to help minorities in the wake of recent court decisions striking down racial preferences. “This task has always been difficult, but is particularly arduous now in the light of recent rulings by the courts,” Powell said.